Ten Network Holdings Limited (TEN) invests in The Ten Group Pty Limited and controlled entities, which operates multi-channel commercial television licences in Sydney, Melbourne, Brisbane, Adelaide and Perth. Ten Network operates three free-to-air television channels, TEN, ONE and ELEVEN. TEN is the home of entertaining productions and major franchises for viewers under 50.
Over the past two and a half years, we have seen the price of TEN fell from $1.70 to its current price of $0.38.
The problem includes content and the increase in competition from other sources of media being online, tablets and pay TV. With their viewers being considered the young generation between 18–49 years old they are now, competing for their attention from a number of new sources not even considered when TEN was first established. A competition, which they seem to be losing.
In July this year, they completed a retail entitlement offer, which raised $39 million at a price of $0.51 per share. This was part of a $200 million capital rising. The question is can TEN adapt quickly enough to adjust to the new world of entertainment. Failure to do so will certainly see any media stocks collapse. Get it right and these companies are gold mines.
With TEN at the current prices it is tempting to look to buy a few on speculations that they will get it right and you will see a good return on your money.
Our fair value remains at $0.60 but we consider this company high risk and only for those investors who have a highly speculative investment profile.
For more information on Ten Network Holdings Limited (TEN) please contact us on 07 4771 4577.