Monday, January 17, 2011

Discover This Communications Company Opportunity

Discovery Communications
Discovery Communications Weekly Stock Pick


My stock pick this week is a buy long position on Discovery Communications Ticker DISCA. Discovery Communications owns and operates the Discovery Channel, TLC, Animal Planet, Discovery Health, Discovery Kids, Science Channel, Planet Green, Investigation Discovery, Military Channel, FitTV, HD Theater to name a few, and is now in a joint venture with Oprah Winfrey Network.

Old School New School

I’ve learned more from these types of new TV channels than I ever learned from old school anything. Children today can have more fun learning and being more interactive with these new age learning TV channels and programs than ever before. There’s also plenty of excellent unique programming for the teenagers and parents too. High quality content for all ages. New information you can really use to better your life and lifestyle.

Discovery Communications CEO David Zaslav

Discovery CEO David Zaslav is managing this global media giant that has better content, shows than ever before with characters like adventure survivalist Bear Grylls, Sarah Palin, the Deadliest Catch crew, and Oprah Winfrey amongst many others.

Discovery's Revenues, Operating Margins and Return On Investment

Revenues have also increased to 10 per cent in the first three quarters of 2010, thanks to increased viewers and advertising revenues. Domestic operating margins have increased to an amazing 59 per cent in three years time, and its international operating margins have increase to 43 per cent. Discovery’s shares have responded with a 23% return last year.

Mr. Zaslav sees room to increase revenues and margins even more this year to the skepticism of some analysts. Mr. Zaslav has helped Discovery grow to a market valuation of more than $16 billion during his stay in the CEO seat.

Re-Launching and Removing Content

Discovery has been re-launching and or removing struggling channels, and its newest hit channel TLC has gone to the USA’s number six network from number 10 in 2008. Discover’s number one priority they say is to build their winning brands and viewers with high quality content and talent. TLC will now get more international exposure with its expansion from 50 million homes to its 100 million goal target.

Global Investment Exposure with Discovery

Discovery is investing more in global content than ever before because it can make larger returns in international markets and new digital media. Discovery is now in 180 markets worldwide, which is more than 80% of the world’s population.

Cable TV Content That Entertains In Any Language

Mr. Zaslav admits that Discovery is fortunate that its content works well around the world. Its content works well in most all languages. He helps creates its global attraction with the Discovery global committees that review how well a show will perform before bringing it to US televisions. With Discovery’s global growth, Mr. Zaslav spends almost lhalf his time traveling around the world working on new deals.

Discovery's Core Business Model

The core of Discovery’s business model remains in cable TV for the time being, which Mr. Zaslav says is very healthy, even with the new but not totally developed internet TV media starting to take some market share. Discovery’s core cable business in the US is slowing down some, but its new growing international markets are 15 years behind the US currently and consumers are still upgrading to their TV sets to high definition and still watching a lot of television. Discovery has setup partnerships with Sony and IMAX for 3D viewing and should make its content even more closer to real than ever and entertaining to attract more viewers.

Discovery's Future Growth Prospects

Mr. Zaslav says Discovery’s growth opportunities have just begun, and with its recent innovative new age content, its stock shares might be one of the best discoveries of this year and possibly some years to come.

Buy Long Discover Communication – Ticker DISCA

Buy Entry: 37.69 to 39.50

Stop-Loss: 37.25 or 8% from Your Entry Price

Take Profit Areas: 45.00 to 45.92, 46.70 to 47.69, 52.31 to 53.39, 62.99 to 64.23, 70.37 to 71.75

Discovery Communications Company Profile

Discovery Communications, Inc., through its subsidiaries, operates as a media and entertainment company worldwide. It provides original and purchased programming across various distribution platforms with approximately 100 television networks in 35 languages. The company operates cable and satellite television networks in the United States, including Discovery Channel, TLC, Animal Planet, Discovery Health, Discovery Kids, Science Channel, Planet Green, Investigation Discovery, Military Channel, FitTV, and HD Theater. It also distributes a network of 21 international television brands, including Discovery Channel; Discovery Channel; Discovery Science; Investigation Discovery; Discovery Turbo; Discovery World; HD Networks, Discovery Lifestyle Networks, such as Discovery Travel & Living, Discovery Home & Health, and Discovery Real Time; DMAX; Discovery Kids; People+Arts, Discovery en EspaƱol, and Discovery Familia. In addition, the company provides education services, including Discovery Education Streaming, an online video-on-demand teaching service; and Discovery Education Assessment, a service that enables K-12 educators to measure student progress. Additionally, it offers sound, music, mixing sound effects, and other related services to motion picture studios, independent producers, broadcast networks, cable channels, advertising agencies, and interactive producers; and operates an e-commerce site, DiscoveryStore.com. Discovery Communications has a joint venture agreement with Hasbro Inc. The company is headquartered in Silver Spring, Maryland.

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Click the Discovery Communications stock chart below for a larger view.

Discovery Communications Stock Chart