Scripps Networks Interactive, Inc. (SNI), Discovery Communications Inc. (DISCA), Sirius XM Radio Inc (SIRI): Traditional Media Still Offers Upside

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Going forward, its scale should only help differentiate it further from its peers and keep entrants at bay; its structure requires hefty capital investments and is, therefore, hard to duplicate. Its subscriber growth will further widen the gap with its peers over the next few years, and management plans to achieve this by focusing on the vehicle segment. “Since radio is commonly used in vehicles (…) Sirius XM Radio Inc (NASDAQ:SIRI) will capitalize on rising vehicle sales (…) Management believes Sirius XM Radio Inc (NASDAQ:SIRI)‘ current share represents just 13% of the domestic addressable audience, and while the firm may only capture a portion of that market, we believe it has significant room to grow.” (Morningstar)

Trading at only 6.6 times its earnings, a 14% discount to the industry average, while expected to deliver annual EPS growth rates close to 30% over the next five years, this is a stock you would want to add to your portfolio.

Bottom line

Even if it might sound weird or outdated, I’d recommend investing in the radio business; particularly in Sirius XM Radio Inc (NASDAQ:SIRI). Although both Discovery Communications Inc. (NASDAQ:DISCA) and Scripps Networks Interactive, Inc. (NYSE:SNI) offer alluring investment opportunities, I believe that Sirius’ combination of an attractive valuation and compelling growth prospects going forward make it a value stock that you should include in your portfolio.

Damian Illia has no position in any stocks mentioned. The Motley Fool recommends Scripps Networks Interactive.

The article Traditional Media Still Offers Upside originally appeared on Fool.com and is written by Damian Illia.

Damian is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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