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Television Provider Dishes Out Some Dough (DISH)

DISH Network (NASDAQ: DISH) settled a lawsuit over the weekend with AMC Networks and Cablevision (NYSE: CVC) that will return shows like “Walking Dead” back to the satellite television provider. In July, DISH Network decided to terminate a deal to carry AMC’s high definition service Voom HD. The decision also affected programming channels like the Sundance Channel, WE tv and IFC Films Networks. A hint of a deal on the table began circulating last Thursday when the trial was adjourned.

The settlement calls for DISH to pay $700 million to Cablevision and AMC Networks, plus surrendering its 20% stake in Voom HD. However, it was not all pay for DISH. It received 45 spectrum licenses in different markets with a total population of 150 million people. Under the agreement, AMC will return to DISH on Sunday while the other channels will not air until November 1. Investors and traders in DISH Network seemed to breathe a sigh of relief. The original suit by AMC asked for $2.4 billion in damages.

It seems like DISH has served a plate full of controversy lately. On October 5, Gannett Broadcasting (NYSE: GCI) threatened to block DISH customers over Gannett’s proposed rate hike. The action would have affected DISH customers in markets such as Atlanta, Washington D.C., Denver, Phoenix and Minneapolis. The two settled their disagreement a few days later, and DISH shares began a rally that has seen the stock gain 10% in the last 10 days.

The weekend news of the AMC-Cablevision deal had traders pounding the table for more shares. At the opening bell, DISH shares gapped 42 cents higher to start the trading week at $35.89, which also marked the low for the day. It was the second such gap in the last eight days. Share prices steadily climbed in the morning and buyers gave the stock one last shove late in the day to a fresh annual high of $36.68. At the end of trading, share prices pulled back a tad and the stock closed up $1.16 at $36.63 for a gain of over 3%. A little more than 6.6 million shares traded during the session, or almost three times the daily average.

After a rocky four-month period from April to July, which saw share prices decline by 23%, the stock has been on a roll. After hitting a summer low around a price of $26.00, DISH shares have risen 50% to a new annual high set today. The 52-week low was set last November when shares traded for $23.00.

Currently, 23 investment research analysts cover the stock. Ratings on DISH shares are evenly split between “buy” and “hold” with each garnering a vote of 10 analysts. The consensus view places a price target of $34.19 on the stock. The company is expected to release third-quarter financial results on November 7, and analysts expect DISH to earn 55 cents per share.

DISH Network is a pay television provider with approximately 14 million customers. The company offers access to local and national programming plus pay-per-view channels. In April of 2011, Dish Network acquired Blockbuster Entertainment. The Englewood, Colorado, company was founded in 1980.

Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email (alanmasterson@wallstreetpr.com) or his Google+ page (https://plus.google.com/103338576216002376250).

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