The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (MagicDiligence) -- The easiest way to think about CTC Media (CTCM) is as "the Russian CBS (CBS)." While many understandably flinch at the idea of investing in such a volatile country as Russia, CTC looks like a well-run, conservative outfit. This broadcast network is debt-free (pretty remarkable for a media company) and has nearly $130 million in cash on the balance sheet. Operating margins and cash flow generation have been steady over the past 5 years, even in the 2008-09 period. Share dilution has been minimal.
Of particular interest is the firm's recent payment of dividends. While there seems to be no consistent policy (it has been quarter-to-quarter), there have now been 6 consecutive quarterly dividends. The stated dividend intention of $130 million for fiscal 2010 represents a roughly 8.7% yield on the current market cap of $1.5 billion.
That's a significant payout on top of what is also a value story. CTC's MFI earnings yield is 17% (P/E ratio is 9.1), extremely low for a 20% grower in a long-tail growth market. The stock's current price of $9.50 or so is right near the 52-week low. By comparison, the 52-week high is $25, a 178% gap! At current valuations, CTC seems to have a lot of upside with limited downside and a large dividend yield for protection.CTC operates 3 networks: CTC, the largest under its umbrella, is currently the No. 4 TV station in Russia, reaching 94% of Russian households and carrying an 11% audience share in its target 6-54 demographic. Domashny, launched in 2005, is a network targeting 25-60 year old female viewers (a desirable advertising demographic), reaching 82% of households with a 3% share. Finally there is DTV, acquired in 2008 and targeting 25-54 year old viewers, reaching 73% of households and holding a 2% audience share. CTC also has a number of other businesses, including smaller networks in Kazakhstan and Moldova, a YouTube-clone called Videomore.ru, content production studios and a number of company-owned regional stations. The majority of broadcast stations are independently owned and operated affiliates. Virtually all of the company's revenue is from traditional, free over-the-air advertising.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV