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I bought Vivendi (FRA: VIV) at €16.38 on 9 February 2012 and
sold at €20 on 7 February 2014. I made estimated profit of 32.8%, net of
transaction costs.
VIV is
French conglomerate firm that has companies that are leader or number 2 in
their own respective industries. It has paid the following dividend during our
holding period:
1.
€1 per share plus 1 bonus share per 30 shares
2.
€1 per share
The rationale of investing VIV stock is that it is undervalued on the basis of earning power. In the past, VIV has been acquiring and divest its companies over again and again. These companies are usually top leader or number 2 in its own specific industries. As a result, it can be difficult for the analysts to value it as VIV constantly change itself. Debt was used to finance acquisitions that Ire made few years ago. Previous CEO resigned due to strategic difference between him and the chairman.
The current plan being put forward by the board of directors
and the management is to reduce debt by using the proceeds which are made by selling
selected companies. These companies are deemed to be non-strategic to VIV in
the eyes of the board of directors. The aim is to have VIV to be international
media group. The major future earnings will be derived from Universal (music
and movie producers), Canal+ (French TV station), and GVT (Brazilian
telecommunication).
In addition, its French telecommunication, SFR is suffering
from highly competitive environment where telecom firms are having price war,
affecting SFR’s profit margin. That is why VIV wants to spin-off with the mind
of certain share price or sell SFR to its competitor at reasonable price.
The
catalysts behind the rise of the share price are as follows:
1. Sale of large percentage of Activision Blizzard
back to itself (this effectively turn Activision Blizzard from subsidiary to
associate in the eye of financial reporting standard)
2.
Public announcement to divest unprofitable
companies
3. Confirmation that Etisalat acquire VIV’s Marco
telecom (telecommunication firm in Morroco)
I am selling VIV because I don’t think highly of media
companies’ earning power. Furthermore, I have no idea about the degree of its
earning power in the entertainment and media industry. Thus, I am taking the
safe option to sell it.Movies
Escape Plan (Hollywood Movie 2013)
Synopsis:
A newly prison inmate is observing the guards and layout of the prison. The aim of his action is develop a plan to escape the prison.
Rating: 7/10
Remark: Uniquely interesting concept. Two big names attracted me into watching this show but there is no 'wow' factor.
The Billionaire (Thailand Movie 2011)
Synopsis:
It is a little hyped real-life story behind the owner of popular seaweed snack. The name of that snack is Tae Kae Noi.
Rating: 9/10
Remark: It is very good show telling how difficult it is to conduct business.
Ender's Game (Hollywood Movie 2013)
Synopsis:
It is adapted from a friction story which was written on the popular selling storybook. Ender is selected for the direct program. This program is to lead the fleet to fight aliens in the way that they will never invade or attack again. The developer is trying to train him as fast as possible.
Rating: 7/10
Remark: It is refreshing action movie.
The Hunger Games Catching Fire (Hollywood Movie 2013)
Synopsis:
The empire wants to show off two winners of the Hunger Game. However, the fashion they won in that game inspire the citizen of each state of the empire to revolt. In an attempt to put them down, the empire unveil the plan. What is the plan?
Rating:8/10
Remark: It is similar to Battle Royale Part 1 and then Part 2.
Captain Philips (Hollywood Movie 2013)
Synopsis:
It is based on the real life story where an American ship was hijacked by Somalia pirates. Captain Philips is trying to protect his crews and ship. How shall he deal them?
Rating:9/10
Remark: it is well done movie.
Thor: The Dark World (Hollywood Movie 2013)
Synopsis:
A past enemy whom Thor's clan thought he was dead woke up from eternal sleep. He wants to claim a weapon that crash universe. However it somehow involve a human whom Thor loves. How will Thor settle such matter?
Rating:8/10
Remark: Smooth plot.
Tony Del Piero wrote and posted at at 9:31 pm
