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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 6/10

vs
industry
vs
history
Cash to Debt 0.15
DTV's Cash to Debt is ranked higher than
69% of the 904 Companies
in the Global Pay TV industry.

( Industry Median: 0.32 vs. DTV: 0.15 )
DTV' s 10-Year Cash to Debt Range
Min: 0.06   Max: No Debt
Current: 0.15

Equity to Asset -0.26
DTV's Equity to Asset is ranked higher than
59% of the 864 Companies
in the Global Pay TV industry.

( Industry Median: 0.38 vs. DTV: -0.26 )
DTV' s 10-Year Equity to Asset Range
Min: -0.32   Max: 0.67
Current: -0.26

-0.32
0.67
Interest Coverage 6.13
DTV's Interest Coverage is ranked higher than
76% of the 605 Companies
in the Global Pay TV industry.

( Industry Median: 6.57 vs. DTV: 6.13 )
DTV' s 10-Year Interest Coverage Range
Min: 0.48   Max: 99.77
Current: 6.13

0.48
99.77
F-Score: 7
Z-Score: 2.61
M-Score: -3.37
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 8/10

vs
industry
vs
history
Operating margin (%) 15.81
DTV's Operating margin (%) is ranked higher than
87% of the 907 Companies
in the Global Pay TV industry.

( Industry Median: 12.35 vs. DTV: 15.81 )
DTV' s 10-Year Operating margin (%) Range
Min: -18.66   Max: 17.1
Current: 15.81

-18.66
17.1
Net-margin (%) 8.47
DTV's Net-margin (%) is ranked higher than
85% of the 907 Companies
in the Global Pay TV industry.

( Industry Median: 6.41 vs. DTV: 8.47 )
DTV' s 10-Year Net-margin (%) Range
Min: -17.16   Max: 16.58
Current: 8.47

-17.16
16.58
ROA (%) 12.70
DTV's ROA (%) is ranked higher than
95% of the 915 Companies
in the Global Pay TV industry.

( Industry Median: 4.65 vs. DTV: 12.70 )
DTV' s 10-Year ROA (%) Range
Min: -11.69   Max: 15.13
Current: 12.7

-11.69
15.13
ROC (Joel Greenblatt) (%) 56.79
DTV's ROC (Joel Greenblatt) (%) is ranked higher than
93% of the 913 Companies
in the Global Pay TV industry.

( Industry Median: 21.49 vs. DTV: 56.79 )
DTV' s 10-Year ROC (Joel Greenblatt) (%) Range
Min: -43   Max: 65.58
Current: 56.79

-43
65.58
Revenue Growth (3Y)(%) 28.30
DTV's Revenue Growth (3Y)(%) is ranked higher than
98% of the 806 Companies
in the Global Pay TV industry.

( Industry Median: 3.90 vs. DTV: 28.30 )
DTV' s 10-Year Revenue Growth (3Y)(%) Range
Min: -43   Max: 98.6
Current: 28.3

-43
98.6
EBITDA Growth (3Y)(%) 25.90
DTV's EBITDA Growth (3Y)(%) is ranked higher than
94% of the 720 Companies
in the Global Pay TV industry.

( Industry Median: 3.40 vs. DTV: 25.90 )
DTV' s 10-Year EBITDA Growth (3Y)(%) Range
Min: -35.8   Max: 147.7
Current: 25.9

-35.8
147.7
EPS Growth (3Y)(%) 27.70
DTV's EPS Growth (3Y)(%) is ranked higher than
93% of the 681 Companies
in the Global Pay TV industry.

( Industry Median: 1.90 vs. DTV: 27.70 )
DTV' s 10-Year EPS Growth (3Y)(%) Range
Min: -30   Max: 83.5
Current: 27.7

-30
83.5
» DTV's 10-Y Financials

Financials


Revenue & Net Income
Cash & Debt
Oprt. Cash Flow & Free Cash Flow

» Details

Guru Trades

Q4 2013

DTV Guru Trades in Q4 2013

Paul Tudor Jones 8,900 sh (New)
David Dreman 3,337 sh (New)
Joel Greenblatt 131,013 sh (+119.34%)
Jean-Marie Eveillard 718,758 sh (+98.73%)
John Rogers 121,835 sh (+49.64%)
Bill Nygren 3,739,000 sh (+2.75%)
Wallace Weitz 2,033,920 sh (+2.69%)
RS Investment Management 1,027,552 sh (+2.63%)
Ruane Cunniff 35,149 sh (+2.4%)
Manning & Napier Advisors, Inc 7,330,278 sh (+0.79%)
Ronald Muhlenkamp 101,740 sh (+0.51%)
George Soros 503,453 sh (unchged)
Mario Cibelli 15,000 sh (unchged)
Robert Bruce 86,500 sh (unchged)
Warren Buffett 36,514,700 sh (unchged)
Jeff Auxier 27,473 sh (unchged)
PRIMECAP Management 14,219,990 sh (-0.63%)
Scott Black 201,858 sh (-1.91%)
Mario Gabelli 4,537,737 sh (-3.89%)
Mason Hawkins 21,710,357 sh (-6.15%)
Jeremy Grantham 24,288 sh (-7.08%)
Jim Simons 2,004,400 sh (-37.41%)
Lou Simpson 1,664,476 sh (-43.25%)
John Burbank 870,095 sh (-45.65%)
Chuck Akre 500,000 sh (-70.59%)
Steven Cohen 63,348 sh (-94.83%)
» More
Q1 2014

DTV Guru Trades in Q1 2014

Louis Moore Bacon 5,818 sh (New)
James Barrow 326,680 sh (New)
Chuck Royce 2,500 sh (New)
Ronald Muhlenkamp 194,275 sh (+90.95%)
Paul Tudor Jones 12,700 sh (+42.7%)
Jean-Marie Eveillard 1,011,551 sh (+40.74%)
George Soros 583,453 sh (+15.89%)
Ruane Cunniff 35,149 sh (unchged)
Chuck Akre 500,000 sh (unchged)
Jeff Auxier 27,473 sh (unchged)
Robert Bruce 86,500 sh (unchged)
Bill Nygren 3,739,000 sh (unchged)
Mario Cibelli 15,000 sh (unchged)
Jeremy Grantham Sold Out
Mason Hawkins Sold Out
John Burbank Sold Out
Wallace Weitz 2,032,110 sh (-0.09%)
PRIMECAP Management 14,123,090 sh (-0.68%)
Lou Simpson 1,645,514 sh (-1.14%)
David Dreman 3,174 sh (-4.88%)
John Rogers 115,280 sh (-5.38%)
Warren Buffett 34,514,700 sh (-5.48%)
Mario Gabelli 4,135,034 sh (-8.87%)
Scott Black 180,086 sh (-10.79%)
Manning & Napier Advisors, Inc 6,508,879 sh (-11.21%)
Joel Greenblatt 114,421 sh (-12.66%)
Steven Cohen 45,903 sh (-27.54%)
RS Investment Management 735,260 sh (-28.45%)
Jim Simons 1,197,400 sh (-40.26%)
» More
Q2 2014

DTV Guru Trades in Q2 2014

John Paulson 10,000,000 sh (New)
John Burbank 27,679 sh (New)
Caxton Associates 243,500 sh (New)
Jeremy Grantham 426,600 sh (New)
Pioneer Investments 110,764 sh (New)
Joel Greenblatt 359,256 sh (+213.98%)
James Barrow 495,000 sh (+51.52%)
Ruane Cunniff 44,114 sh (+25.51%)
Jim Simons 1,468,992 sh (+22.68%)
David Dreman 3,701 sh (+16.6%)
Lou Simpson 1,646,368 sh (+0.05%)
Louis Moore Bacon 200,000 sh (unchged)
Robert Bruce 86,500 sh (unchged)
Steven Cohen 250,000 sh (unchged)
John Rogers Sold Out
Chuck Akre Sold Out
Jean-Marie Eveillard Sold Out
Manning & Napier Advisors, Inc Sold Out
Mario Cibelli Sold Out
George Soros Sold Out
Bill Nygren Sold Out
Chuck Royce Sold Out
Ronald Muhlenkamp 193,638 sh (-0.33%)
Jeff Auxier 27,373 sh (-0.36%)
PRIMECAP Management 14,006,090 sh (-0.83%)
Mario Gabelli 3,970,372 sh (-3.98%)
Louis Moore Bacon 5,157 sh (-11.36%)
RS Investment Management 644,189 sh (-12.39%)
Wallace Weitz 1,681,100 sh (-17.27%)
Paul Tudor Jones 10,234 sh (-19.42%)
Warren Buffett 23,467,995 sh (-32.01%)
Scott Black 67,626 sh (-62.45%)
» More
Q3 2014

DTV Guru Trades in Q3 2014

Ken Fisher 3,911 sh (New)
Jeremy Grantham 2,199,000 sh (+415.47%)
Louis Moore Bacon 14,148 sh (+174.35%)
Warren Buffett 30,000,000 sh (+27.83%)
John Paulson 10,400,000 sh (+4%)
Robert Bruce 86,500 sh (unchged)
Ronald Muhlenkamp 193,638 sh (unchged)
Pioneer Investments Sold Out
David Dreman Sold Out
Paul Tudor Jones Sold Out
Caxton Associates Sold Out
Steven Cohen Sold Out
John Burbank Sold Out
PRIMECAP Management 13,974,790 sh (-0.22%)
Lou Simpson 1,641,997 sh (-0.27%)
Mario Gabelli 3,918,667 sh (-1.3%)
Scott Black 65,841 sh (-2.64%)
Ruane Cunniff 42,854 sh (-2.86%)
Wallace Weitz 1,624,412 sh (-3.37%)
James Barrow 436,706 sh (-11.78%)
Joel Greenblatt 238,550 sh (-33.6%)
Jeff Auxier 16,373 sh (-40.19%)
RS Investment Management 356,789 sh (-44.61%)
Jim Simons 88,592 sh (-93.97%)
» More
» Details

Insider Trades

Latest Guru Trades with DTV

(List those with share number changes of more than 20%, or impact to portfolio more than 0.1%)

GuruDate Trades Impact to Portfolio Price Range * (?) Current Price Change from Average Current Shares
Warren Buffett 2014-09-30 Add 27.83%0.52%$83.55 - $87.72 $ 87.051%30000000
John Paulson 2014-09-30 Add 4%0.14%$83.55 - $87.72 $ 87.051%10400000
Wallace Weitz 2014-09-30 Reduce -3.37%0.14%$83.55 - $87.72 $ 87.051%1624412
Joel Greenblatt 2014-09-30 Reduce -33.6%0.13%$83.55 - $87.72 $ 87.051%238550
John Burbank 2014-09-30 Sold Out 0.04%$83.55 - $87.72 $ 87.051%0
David Dreman 2014-09-30 Sold Out 0.02%$83.55 - $87.72 $ 87.051%0
Ken Fisher 2014-09-30 New Buy$83.55 - $87.72 $ 87.051%3911
John Paulson 2014-06-30 New Buy3.7%$74 - $88.25 $ 87.057%10000000
Bill Nygren 2014-06-30 Sold Out 2.3%$74 - $88.25 $ 87.057%0
Chuck Akre 2014-06-30 Sold Out 1.2%$74 - $88.25 $ 87.057%0
Scott Black 2014-06-30 Reduce -62.45%0.94%$74 - $88.25 $ 87.057%67626
Wallace Weitz 2014-06-30 Reduce -17.27%0.86%$74 - $88.25 $ 87.057%1681100
Warren Buffett 2014-06-30 Reduce -32.01%0.8%$74 - $88.25 $ 87.057%23467995
Mario Cibelli 2014-06-30 Sold Out 0.52%$74 - $88.25 $ 87.057%0
George Soros 2014-06-30 Sold Out 0.44%$74 - $88.25 $ 87.057%0
Joel Greenblatt 2014-06-30 Add 213.98%0.26%$74 - $88.25 $ 87.057%359256
Jean-Marie Eveillard 2014-06-30 Sold Out 0.2%$74 - $88.25 $ 87.057%0
John Rogers 2014-06-30 Sold Out 0.11%$74 - $88.25 $ 87.057%0
John Burbank 2014-06-30 New Buy0.04%$74 - $88.25 $ 87.057%27679
James Barrow 2014-06-30 Add 51.52%0.02%$74 - $88.25 $ 87.057%495000
Ruane Cunniff 2014-06-30 Add 25.51%$74 - $88.25 $ 87.057%44114
Mason Hawkins 2014-03-31 Sold Out 7.3%$68.11 - $79.99 $ 87.0519%0
John Burbank 2014-03-31 Sold Out 2%$68.11 - $79.99 $ 87.0519%0
Ronald Muhlenkamp 2014-03-31 Add 90.95%1.24%$68.11 - $79.99 $ 87.0519%194275
Scott Black 2014-03-31 Reduce -10.79%0.16%$68.11 - $79.99 $ 87.0519%180086
Mario Gabelli 2014-03-31 Reduce -8.87%0.15%$68.11 - $79.99 $ 87.0519%4135034
Warren Buffett 2014-03-31 Reduce -5.48%0.13%$68.11 - $79.99 $ 87.0519%34514700
Jean-Marie Eveillard 2014-03-31 Add 40.74%0.06%$68.11 - $79.99 $ 87.0519%1011551
James Barrow 2014-03-31 New Buy0.04%$68.11 - $79.99 $ 87.0519%326680
Lou Simpson 2013-12-31 Reduce -43.25%4.07%$57.95 - $68.4 $ 87.0536%1664476
Chuck Akre 2013-12-31 Reduce -70.59%3.04%$57.95 - $68.4 $ 87.0536%500000
John Burbank 2013-12-31 Reduce -45.65%1.42%$57.95 - $68.4 $ 87.0536%870095
Mason Hawkins 2013-12-31 Reduce -6.15%0.42%$57.95 - $68.4 $ 87.0536%21710357
Wallace Weitz 2013-12-31 Add 2.69%0.12%$57.95 - $68.4 $ 87.0536%2033920
Joel Greenblatt 2013-12-31 Add 119.34%0.12%$57.95 - $68.4 $ 87.0536%131013
Jean-Marie Eveillard 2013-12-31 Add 98.73%0.07%$57.95 - $68.4 $ 87.0536%718758
John Rogers 2013-12-31 Add 49.64%0.03%$57.95 - $68.4 $ 87.0536%121835
David Dreman 2013-12-31 New Buy0.02%$57.95 - $68.4 $ 87.0536%3337
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Guru Investment Theses on Directv

Mario Gabelli Comments on DIRECTV - Jul 30, 2014

DIRECTV (DTV) (1.7%) (DTV - $85.01 - NASDAQ) is the largest pay TV provider in the world, with over twenty million subscribers in the U.S. and over twelve million throughout Latin America. Originally part of General Motors, DTV used its technological advantage, focus on high income customers, recognition of the necessity for superior customer service, and clever (Sunday Ticket) participation in exclusive sports programming to cement its position in the U.S. The company used essentially the same strategy in Latin America, where it is benefiting from the growth of the middle class in countries such as Brazil and Colombia. Atop a superior operating business, DTV has layered a capital structure that maximizes equity returns. The company has used modest leverage to repurchase stock, in the process cutting its shares outstanding by more than half over the last five years. Long of interest to its telecom distribution partners, AT&T agreed to acquire the company in April 2014 for $95 per share in cash and stock. We expect the transaction to be approved and close early in 2015.

From Mario Gabelli (Trades, Portfolio)’s The Gabelli Asset Fund Second Quarter 2014 Shareholder Commentary.

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Weitz Investment Management Comments on DIRECTV - Jul 22, 2014

DIRECTV (DTV) is on the receiving end of a takeover offer—it is the target of an acquisition by AT&T. DIRECTV had grown its business steadily over the years and had increased its value per share significantly by making very large share repurchases. AT&T is offering roughly twice the price we paid for our first shares about three years ago. We have mixed feelings about giving up our holdings but it has been a good investment for us.



From Wallace Weitz (Trades, Portfolio)'s Q2 Shareholder Letter.



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Longleaf Partners Comments on DirecTV - Apr 18, 2014

During the quarter we exited DIRECTV (DTV), a highly successful core holding in our U.S. and Global accounts for over a decade. We discuss our DTV experience not to showcase one winner, but because the investment illustrates the process and approach we follow for holdings across all mandates and highlights some of Southeastern's unique research strengths.



History of DTV Investment (based on Longleaf Partners Fund) Sometimes we can own a company in indirect ways that create part of the discount to intrinsic worth. In the case of DTV, we owned the underlying business via three different stocks over our thirteen-year holding period as shown on the chart that follows. Initially, in 2001 we bought GMH, the tracking stock that General Motors created for the Hughes division that included all of its satellite businesses. By early 2004, the company had been spun fully out of GM and renamed DIRECTV Group. Over the following four years, we opportunistically added to and trimmed our position.



In early 2008, John Malone exchanged Liberty Media's (LMDIA) News Corp shares (NWS) for the 40+% of DTV that NWS owned. We previously had purchased Liberty Media Corp, the precursor to LMDIA, and the 2008 transaction increased our underlying ownership in DTV. Throughout 2008, we swapped DTV for LMDIA which traded at a steeper discount to underlying value. In the financial crisis, although DTV's business remained remarkably stable, LMDIA shares became severely discounted when debt at other Liberty affiliates cast a shadow on LMDIA. We made sure we understood the obligations of each Liberty entity and John Malone's intentions, and then took LMDIA to a "double weight" (10%) position while maintaining our direct DTV stake. In 2009, LMDIA and DTV merged. Over the next four years, the intrinsic value of the company grew as did the stock price. We trimmed our position as the price-to-value (P/V) gap closed and completely exited in the first quarter of 2014 when the stock reached our appraisal. Because of the strength of DTV's franchise and management partners, value could continue to build unabated. We followed our discipline to exit when the price reached our appraisal, leaving no margin of safety in the stock.



Strong Business



In every new investment, we analyze why a stock is cheap and how our view of the business differs from the market's view. Initially, DTV's core strongholds were rural subscribers with no cable alternatives and premium subscribers willing to pay for the technologically superior digital picture and recording as well as exclusive sports programming. The most valuable DTV subscribers were immune from the market's concern - the "triple play threat" of a single provider for video, voice and broadband. Subsequent subscriber growth and pricing power as shown through rising ARPU (average revenue per user) were proof of DTV's advantages.



When we own a name we evaluate how the business evolves and adjust our assumptions about competitive advantages and value growth. Over time, DTV's U.S. subscriber base grew to more than 20 million, and growth inevitably slowed. Cable providers developed better picture quality and digital recording, and "cord cutting" (leaving pay-TV for video delivery alternatives) also received increasing attention. Verizon invested heavily to become a competitor. Satellite provider DISH's Hopper grew more competitive due to combining cord cutting with high definition recording. NFL programming became less exclusive. As the competitive landscape changed, at three different points over our holding period, we appointed an analyst to serve as "Devil's Advocate" (DA) to challenge the entire investment case and appraisal. Although DTV's U.S. ARPU continued to increase, we reduced our appraisal multiples to account for the increasingly competitive U.S. environment. Management also recognized the U.S. evolution and developed Latin American markets where the lack of infrastructure minimized cable competition. Over the last five years, we adjusted our appraisal as DTV transitioned from a primarily U.S. provider to a company with almost half of its value attributable to its Latin American operations. However, we recently lowered our appraisal of the Latin American business based on currency fluctuations and other geopolitical developments. While shorter-term conditions made a lower appraisal unavoidable, we remained very bullish on the company's long-term prospects in Latin America.



Good Management



The operating expertise of two successive CEOs, first Chase Carey and then Mike White, kept the company competitive over the long run, even as the landscape morphed. In addition to improving service, containing costs, and providing exclusive programming, management upgraded customer quality ahead of the recession, removing subscribers with lower credit and poor payment history. This move paid off handsomely as subscriber retention gave



DTV an edge through the financial crisis. Many CEOs have strong operating abilities, but what sets apart the all-stars is a deep understanding of building value per share through wise capital allocation. Our successive DTV partners clearly understood the risk/reward calculus when they deployed the company's resources. They successfully invested for growth by comparing subscriber acquisition cost (SAC) to the value of the cash flow stream from the incremental new subscriber. They also returned enormous capital to shareholders, repurchasing over 60% of the company's shares over the last 10 years when prices were well below intrinsic value.



We conduct a comprehensive assessment of management at the outset of every investment. At DTV, we did this a second time in 2010 when Mike White came from Pepsi to be CEO after Chase Carey left for NWS (which became 21st Century Fox). We quickly called upon our broad network of contacts, including some who had worked directly with Mike, to gain insight into his skills, character, and record, and we received positive feedback.



Deeply Discounted Price



How can strong businesses with good management become deeply discounted? Four common ways that we find a cheap stock applied at DTV. First, a mismatch between real or perceived threats and when or how they will impact value creates opportunity. In some cases, short-term challenges have little impact on long-term value. In the case of DTV, the stock price was over-discounting the near-term "triple play threat," even though longer-term technology changes did alter the competitive landscape.



Second, we see many external reports that determine price targets by simply putting a multiple on earnings. Our due diligence breaks down business segments, evaluates free cash flow versus earnings, and differentiates between capital spending to maintain the business versus to grow it. We analyze growth spending as a choice that must be weighed against capital allocation options. At DTV, management's investment in U.S. SAC lowered short-term profits, but when U.S. growth spending slowed, the cash flow from those subscribers continued to roll in, generating a high long-term return. A similar dynamic continues today with the build out of Latin America.



Third, we often find a "sum of the parts" discount when we can own a business indirectly through another stock. Our appraisals break down the value of each underlying piece of a company. The most extreme example at DTV came in December 2008 when we could own a share of DTV through LMDIA for less than half the price of directly owning DTV. Fourth, controversial management can generate a discount. When we doubled down on LMDIA, skepticism about John Malone played a part in the price decoupling from the value. Although accurately assessing executives is difficult, we spend immense time reviewing operating and capital allocation history, understanding incentives, interviewing others who have interacted with the person, meeting with the CEO, and researching professional and personal backgrounds.



From Longleaf Partners first quarter 2014 commentary.



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Mario Gabelli Comments on DIRECTV - Jan 06, 2014

DIRECTV (1.4%) (DTV - $59.75 - NASDAQ)(DTV) is the largest pay television provider in the world, with nearly twenty million subscribers in the United States and eight million subscribers throughout Latin America. Originally part of General Motors, DTV used its technological advantage, focus on high income customers, recognition of the necessity for superior customer service, and clever (Sunday Ticket) participation in exclusive sports programming to cement its position in the U.S. The company used essentially the same strategy in Latin America, where it is benefiting from the growth of the middle class in countries such as Brazil and Colombia. Atop a superior operating business, DTV has layered a capital structure that maximizes equity returns. The company has used modest leverage to repurchase stock, in the process cutting its shares outstanding by more than half over the last six years.

 

From Mario Gabelli (Trades, Portfolio)'s third quarter 2013 commentary.

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Mason Hawkins's Longleaf Partners Comments on DIRECTV - Oct 25, 2013

The Fund had only three detractors in the quarter: Mosaic, Abbott Labs, and DIRECTV (DTV), with only Mosaic negatively impacting YTD results. We bought and exited Mosaic during the third quarter. Our case changed quickly with the potash industry drama that caused prices to drop. Abbott was down 4% in the quarter following FX headwinds, concerns over tougher rules for device approval in Europe, and issues at a dairy supplier leading to a meaningful product recall in the baby formula division in China. DIRECTV slipped 3% on increased subscriber churn amidst a challenged Brazilian economy. DIRECTV Latin America remains well positioned to benefit from rising pay-TV penetration in the region, and the mature U.S. business continues to generate higher ARPU (average revenue per user).

From Mason Hawkins' Longleaf Partners Fund third quarter 2013 commentary.


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Mason Hawkins Comments on DirecTV - Aug 12, 2013

Three holdings have been among the largest positive contributors for both the quarter and the first half. DIRECTV (DTV) advanced 9% over the last three months and has risen 23% YTD. We have owned DTV for over eight years as its value has grown along with its price. CEO Mike White is one of our "all-star" partners. He and his team have grown ARPU (average revenue per user) for the company's 20 million U.S. satellite subscribers even as the industry has matured. Management has also made high-return investments in Latin America where subscribers have grown rapidly, making this geographic segment almost half of our DTV appraisal. Management consistently has returned capital to owners through repurchasing undervalued shares, including $1.4 billion in the second quarter.

From Mason Hawkin's semi-annual report 2013.
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Wallace Weitz Comments on DirecTV - Jul 15, 2013

DIRECTV (DTV--$62)(DTV) DTV continues to grow profits in a stable U.S. market and to add subscribers rapidly in Latin America. The economics of the business are very good (subscriptions, growing free cash flow per share) and management’s capital allocation is excellent (careful with acquisitions, substantial share buybacks).

From Wallace Weitz’s second quarter 2013 letter to shareholders.


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Wallace Weitz Comments on Directv - Apr 11, 2013

In one case, our stock went up because of what it didn’t do. DIRECTV (DTV) was seriously considering the purchase of Vivendi’s Brazilian telecom assets. This would have been a very large acquisition and investors feared that it might cause DTV to curtail its stock repurchase program. When DTV pulled out of the bidding, relieved investors bid the stock up over 10%.

From Wallace Weitz's first quarter letter to shareholders.

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Mario Gabelli Comments on DIRECTV
DIRECTV (DTV) (1.7%) (DTV - $85.01 - NASDAQ) is the largest pay TV provider in the world, with over twenty million subscribers in the U.S. and over twelve million throughout Latin America. Originally part of General Motors, DTV used its technological advantage, focus on high income customers, recognition of the necessity for superior customer service, and clever (Sunday Ticket) participation in exclusive sports programming to cement its position in the U.S. The company used essentially the same strategy in Latin America, where it is benefiting from the growth of the middle class in countries such as Brazil and Colombia. Atop a superior operating business, DTV has layered a capital structure that maximizes equity returns. The company has used modest leverage to repurchase stock, in the process cutting its shares outstanding by more than half over the last five years. Long of interest to its telecom distribution partners, AT&T agreed to acquire the company in April 2014 for $95 per share in cash and stock. We expect the transaction to be approved and close early in 2015. Read more...
Weitz Investment Management Comments on DIRECTV
DIRECTV (DTV) is on the receiving end of a takeover offer—it is the target of an acquisition by AT&T. DIRECTV had grown its business steadily over the years and had increased its value per share significantly by making very large share repurchases. AT&T is offering roughly twice the price we paid for our first shares about three years ago. We have mixed feelings about giving up our holdings but it has been a good investment for us. Read more...
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Mario Gabelli (Trades, Portfolio), of GAMCO Investors, recently reported his first quarter results which noted 52 stocks, bringing his total holdings to 839 stocks valued at $18.5 billion. The guru’s fund holds over $43 billion in assets and focuses its investments on an intense equity research-driven culture. The following five stocks are Mario Gabelli (Trades, Portfolio)’s five largest holdings as of the close of the first quarter. Read more...
Longleaf Partners Comments on DirecTV
During the quarter we exited DIRECTV (DTV), a highly successful core holding in our U.S. and Global accounts for over a decade. We discuss our DTV experience not to showcase one winner, but because the investment illustrates the process and approach we follow for holdings across all mandates and highlights some of Southeastern's unique research strengths. Read more...
Mario Gabelli Comments on DIRECTV
DIRECTV (1.4%) (DTV - $59.75 - NASDAQ)(DTV) is the largest pay television provider in the world, with nearly twenty million subscribers in the United States and eight million subscribers throughout Latin America. Originally part of General Motors, DTV used its technological advantage, focus on high income customers, recognition of the necessity for superior customer service, and clever (Sunday Ticket) participation in exclusive sports programming to cement its position in the U.S. The company used essentially the same strategy in Latin America, where it is benefiting from the growth of the middle class in countries such as Brazil and Colombia. Atop a superior operating business, DTV has layered a capital structure that maximizes equity returns. The company has used modest leverage to repurchase stock, in the process cutting its shares outstanding by more than half over the last six years. Read more...

Ratios

vs
industry
vs
history
P/E(ttm) 16.00
DTV's P/E(ttm) is ranked higher than
90% of the 1024 Companies
in the Global Pay TV industry.

( Industry Median: 24.40 vs. DTV: 16.00 )
DTV' s 10-Year P/E(ttm) Range
Min: 10.26   Max: 63.48
Current: 16

10.26
63.48
P/S 1.36
DTV's P/S is ranked higher than
84% of the 1024 Companies
in the Global Pay TV industry.

( Industry Median: 1.85 vs. DTV: 1.36 )
DTV' s 10-Year P/S Range
Min: 0.99   Max: 2.35
Current: 1.36

0.99
2.35
PFCF 13.48
DTV's PFCF is ranked higher than
91% of the 1024 Companies
in the Global Pay TV industry.

( Industry Median: 35.83 vs. DTV: 13.48 )
DTV' s 10-Year PFCF Range
Min: 10.92   Max: 78.4
Current: 13.48

10.92
78.4
EV-to-EBIT 11.71
DTV's EV-to-EBIT is ranked higher than
90% of the 1024 Companies
in the Global Pay TV industry.

( Industry Median: 18.53 vs. DTV: 11.71 )
DTV' s 10-Year EV-to-EBIT Range
Min: -682.6   Max: 33.2
Current: 11.71

-682.6
33.2
PEG 0.52
DTV's PEG is ranked higher than
98% of the 1024 Companies
in the Global Pay TV industry.

( Industry Median: 9999.00 vs. DTV: 0.52 )
DTV' s 10-Year PEG Range
Min: 0.37   Max: 0.75
Current: 0.52

0.37
0.75
Shiller P/E 24.29
DTV's Shiller P/E is ranked higher than
88% of the 1024 Companies
in the Global Pay TV industry.

( Industry Median: 51.97 vs. DTV: 24.29 )
DTV' s 10-Year Shiller P/E Range
Min: 18.67   Max: 1339
Current: 24.29

18.67
1339
Current Ratio 1.01
DTV's Current Ratio is ranked higher than
74% of the 889 Companies
in the Global Pay TV industry.

( Industry Median: 1.04 vs. DTV: 1.01 )
DTV' s 10-Year Current Ratio Range
Min: 0.76   Max: 3.29
Current: 1.01

0.76
3.29
Quick Ratio 0.97
DTV's Quick Ratio is ranked higher than
76% of the 889 Companies
in the Global Pay TV industry.

( Industry Median: 0.97 vs. DTV: 0.97 )
DTV' s 10-Year Quick Ratio Range
Min: 0.68   Max: 2.96
Current: 0.97

0.68
2.96

Valuation & Return

vs
industry
vs
history
Price/DCF (Projected) 1.51
DTV's Price/DCF (Projected) is ranked higher than
88% of the 1024 Companies
in the Global Pay TV industry.

( Industry Median: 2.67 vs. DTV: 1.51 )
DTV' s 10-Year Price/DCF (Projected) Range
Min: 1.3   Max: 551.67
Current: 1.51

1.3
551.67
Price/Median PS Value 0.89
DTV's Price/Median PS Value is ranked higher than
88% of the 1024 Companies
in the Global Pay TV industry.

( Industry Median: 1.13 vs. DTV: 0.89 )
DTV' s 10-Year Price/Median PS Value Range
Min: 0.43   Max: 3.6
Current: 0.89

0.43
3.6
Price/Peter Lynch Fair Value 0.64
DTV's Price/Peter Lynch Fair Value is ranked higher than
99% of the 1024 Companies
in the Global Pay TV industry.

( Industry Median: 9999.00 vs. DTV: 0.64 )
DTV' s 10-Year Price/Peter Lynch Fair Value Range
Min: 0.44   Max: 5.63
Current: 0.64

0.44
5.63
Earnings Yield (Greenblatt) 8.50
DTV's Earnings Yield (Greenblatt) is ranked higher than
89% of the 895 Companies
in the Global Pay TV industry.

( Industry Median: 6.00 vs. DTV: 8.50 )
DTV' s 10-Year Earnings Yield (Greenblatt) Range
Min: 3   Max: 11.7
Current: 8.5

3
11.7
Forward Rate of Return (Yacktman) 32.31
DTV's Forward Rate of Return (Yacktman) is ranked higher than
95% of the 622 Companies
in the Global Pay TV industry.

( Industry Median: 9.65 vs. DTV: 32.31 )
DTV' s 10-Year Forward Rate of Return (Yacktman) Range
Min: -4.5   Max: 46.5
Current: 32.31

-4.5
46.5

Business Description

Industry: Communication Services » Pay TV
Compare:CMCSA, TWC, NPSNY, BSYBY, DISH » details
Traded in other countries:DIG1.Germany,
DirecTV was incorporated in Delaware in 2009. The Company is a provider of digital television entertainment in the United States and Latin America. It operates two direct-to-home, or DTH, business units: DIRECTV U.S. and DIRECTV Latin America, which are differentiated by their geographic location and are engaged in acquiring, promoting, selling and distributing digital entertainment programming primarily via satellite to residential and commercial subscribers. In addition, they own and operate two regional sports networks, or RSNs, hold a minority ownership interest in ROOT SPORTS Northwest and own a 42% interest in Game Show Network, LLC, or GSN, a television network dedicated to game-related programming and Internet interactive game playing. The Company face substantial competition in the MVPD industry and from emerging digital media distribution providers. Its competition includes companies that offer video, audio, interactive programming, telephony, data and other entertainment services, such as cable television, other DTH companies, telcos, wireless companies and companies that are developing new technologies, including online video distributors. The Company provides services in PanAmericana and Brazil from leased transponders on two geosynchronous satellites. Sky Mexico provides its services from leased transponders on a separate satellite. In addition, they lease a backup satellite that serves Sky Brasil and Sky Mexico. The Company is subject to government regulation in the United States, primarily by the FCC and by other federal, state and local authorities. They are subject to similar regulatory agencies in Latin America. They are also subject to the rules and procedures of the International Telecommunication Union, or ITU, a agency of the United Nations, which coordinates global telecommunications networks and services.
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