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OnScreen Media Summit: Some Bright Spots Left For Cable

Q4 Will Be Critical 12/02/2008 08:28:00 AM Eastern

OnScreen Media Summit: Complete Coverage from Broadcasting & Cable and Multichannel News

New York – While the recession and the general economic malaise have put a hurting on cable stocks this year, a panel of experts here said that despite the pressure there are still some bright spots in the sector.
Collins Stewart media analyst Tom Eagan, speaking on a panel at the "B&C-Multichannel News OnScreen Media Summit" here, said that cable stocks are trading at multiples equal to 4.5 times to 5 times 2009 estimated cash flow. During the last recession, he said, cable multiples were about 10 times forward looking cash flow.
 “They are trading at half the level they were, although they have much better balance sheets,” Eagan said. But the analyst warned that the fourth quarter will be a very important one for cable operators, noting that satellite giant DirecTV has hinted that they are seeing increased demand for all of their services, while cable operators like Time Warner Cable have taken a more bearish stance.

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November