Friday 17 January 2014

Analysis of Sky

A German pay TV company
Company: Sky

Business: A German pay TV company. Their customers have access to up to 80 channels in unique HD quality including an exclusive 3D channel. The innovations Sky Go and Sky Anytime also allow the clients to receive their program on the road or on demand. They have 3.5 million customers at the moment.

Active: Only in Germany and Austria.

P/E: -33.1

Warning: Sky has for the last five years made negative results and have in the same period doubled their shares. Simply put... they are living on their poor shareholders!

contrarian values of P/E, P/B, ROE as well as dividend
The P/E are of course awful due to losses so -33.1 and the P/B is also insane high with 153.7 which leads to a very clear no, no from Graham. Earnings to sales as well as ROE are negative. Book to debt is like a poorly capitalised bank. They do however have a very nice growth and in the last five years they have accomplished 7.2% yearly growth which motivates a P/E of around 19 to 22. Since they have since the last five years not had a single year with profit I will not even try to dream up what their "P/E" is right now. They of course also do not pay any dividends.

Conclusion: This is a company that one as a small investor should stay away from. They are trying to establish themselves on the market and are obviously doing pretty well with getting customers but they have yet to show some profit. Until they show a couple of good quarters this company is a no go and if you own it today I feel sorry for you.

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