NEW YORK (TheStreet) -- Shares of Discovery Communications Inc. (DISCA - Get Report) are up 1.73% to $73.98 after the company announced that along with Liberty Global (LBTYA - Get Report) they were purchasing the U.K.-based TV production group All3Media in 50-50 joint venture for about $300 million.
Liberty Global shares are up slightly.
TheStreet Ratings team rates DISCOVERY COMMUNICATIONS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
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"We rate DISCOVERY COMMUNICATIONS INC (DISCA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, notable return on equity, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 5.1%. Since the same quarter one year prior, revenues rose by 28.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- DISCOVERY COMMUNICATIONS INC has improved earnings per share by 32.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, DISCOVERY COMMUNICATIONS INC increased its bottom line by earning $2.97 versus $2.52 in the prior year. This year, the market expects an improvement in earnings ($11.10 versus $2.97).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Media industry and the overall market, DISCOVERY COMMUNICATIONS INC's return on equity exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has slightly increased to $355.00 million or 8.23% when compared to the same quarter last year. In addition, DISCOVERY COMMUNICATIONS INC has also modestly surpassed the industry average cash flow growth rate of 3.44%.
- The net income growth from the same quarter one year ago has exceeded that of the Media industry average, but is less than that of the S&P 500. The net income increased by 29.0% when compared to the same quarter one year prior, rising from $224.00 million to $289.00 million.
- You can view the full analysis from the report here: DISCA Ratings Report