uk financial news This FTSE 100 household name represents a bargain currently trading at less than 70p per share! - The Motley Fool UK uk insurance news
Breaking-Finance.Com - Jabran Khan explains why he feels this well known FTSE 100 company represents a potentially great market crash opportunity at a bargain price.
Breaking-Finance.Com - Many companies in the FTSE 100 have been left reeling in the Covid-19 pandemic. During the lockdown, demand for television services has increased exponentially. The ‘stay at home’ advice has benefitted the streaming industry. It is estimated there were nearly 6m new subscribers to streaming services during the lockdown period. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air… And if you click here we’ll show you something that could be key to unlocking 5G’s full potential... Seen as a more traditional television operator, ITV (LSE:ITV) has seen its share price fall below the 70p per share mark. I love a contrarian buy and feel ITV falls into that category right now. You would have to go back to 2011 to pick up ITV shares at the current price. FTSE 100 bargain ITV’s business model is split into two main categories. The broadcast division of the company runs numerous ITV channels, including its flagship channel ITV1. Its other division is ITV Studios, the largest commercial producer in the UK. The studio produces content for its own channels as well as other UK broadcasters. Additionally the studio division has US and other international arms, which further expands its reach. ITV’s 2019 full-year results show that broadcast generated over 60% of its profits. The FTSE 100 incumbent made an operating profit of £535m on revenue of £3,308m in total. This equates to an above average and (in my opinion) impressive operating margin of 16%. I think that the studio side of the business is where the longer-term value lies. ITV’s unique ability to produce quality content regularly bought by its rivals points towards a long-term opportunity for further growth and success. Year-to-date, ITV’s share price has fallen nearly 60% which could be seen as problematic. I do not see it that way, myself.
The coronavirus lockdown has affected most FTSE companies, which has prompted the cancellation of many advertising campaigns. ITV were affected by this. It reporting a drop of over 40% in advertising demand in April alone in its first-quarter trading update at the end of May. ITV saw external revenue down by 7% and ITV Studios revenue was down by 11%. On the other hand, broadcast revenue was up 2%, as was overall total viewing, by 2% during this period.
A take away for me was that ITV experienced its best quarter since 2009 in terms of ITV1’s share of viewing percentage of 17.9%. In my eyes this means ITV does possess good broadcast and studio content that entices viewership to return for more.
With restrictions easing throughout the country I believe that ITV will see an upturn in advertising demand and overall fortunes. Furthermore ITV Studios will be able to continue to produce new content to add to its extensive backlog in the vault.
I would consider ITV a great opportunity to pick up shares in a well established company that has consistently made profit. Profit will be affected for the current year due to the pandemic, however, most FTSE 100 companies are in a similar position. ITV has plenty of cash to see it through this tough period as well as a healthy balance sheet. Don’t be put off by a cancelled dividend for 2019 – many other businesses throughout the FTSE have adopted this strategy to preserve liquidity in these uncertain times.
ITV would sit in my buy and hold category. It wouldn’t surprise me if this time next year ITV’s share price has more than doubled. A Top Share with Enormous Growth Potential Savvy investors like you won’t want to miss out on this timely opportunity…
Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!).
Not only does this company enjoy a dominant market-leading position…
But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks!
And here’s the really exciting part…
While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes.
That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021. Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge! Jabran Khan has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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