Hot Penny Stocks – Crown Media Holdings (CRWN)

It’s another exciting week for the market. We’ve got European debt downgrades and year-end earnings!

This week we’ll see big financials like Wells Fargo (WFC), Goldman Sachs (GS) and Bank of America (BAC) reporting. A number of the important tech companies are releasing earnings this week as well. Including International Business Machines (IBM), Intel (INTC), Google (GOOG), and Microsoft (MSFT).

Here’s a small cap to check out while everyone else is distracted by big name earnings.

 

QUICK FACTS
Ticker                            CRWN
Industry                         CATV Systems
Recent Price                  $1.20
Market Cap                    $435.2 m
Shares Outstanding       359.7 m
Average Volume            87,425
Dividend Yield               N/A
Website                         http://ir.crownmedia.net/

 

COMPANY DESCRIPTION

Crown Media Holding’s (CRWN) operates two pay TV stations, the Hallmark Channel and Hallmark Movie Channel. If you haven’t guessed already Crown is a reference to Hallmark’s logo.

The channels offer wholesome family friendly programming including television series, movies, literary classics and miniseries. Most programming content comes from “off network” sources. These are acquired by purchasing a license from third parties.

Generally these off network contracts give Crown rights to broadcast movies for 5 to 8 years and television shows for 3 to 5 years.

At the end of Q1 2011 the Hallmark Channel had over 87.4 million subscribers and Hallmark Movies had 40.3 million. Hallmark Movie Channel is one of the fastest growing in the industry. It has added 25 million subscribers over the last three years.
.
Approximately 84% of US paid television subscribers receive the Hallmark Channel.

 

FINANCIALS

CRWN’s most recent quarterly numbers were released on November 3, 2011. 

The company reported revenue of $74 million in the quarter. Up from last year’s third quarter revenue of $62.5 million. This is an increase of 18.4%.  Crown Holdings also reported a net income of $203.3 million… an increase year-over-year from a net income of $5.9 million.

As of September 30, 2011, the company reported $21 million in cash and long-term debt of $505.3 million.

 

KEY METRICS ANALYSIS

Trailing P/E                        1.8 x
Price / Sales                      1.4 x
Return on Assets               8.1 %
Insider ownership               91.8 %
Short Ratio                         32.3 x
Current Ratio                     1.3 x
Total Debt To Equity           233 x

 

RECENT EVENTS

Crown Media made some additions to their financial management team in 2011.

In March the company named Andrew Rooke as their new Executive Vice President and CFO. Before joining the company Rooke worked at a number of News Corporation entities, such as Twentieth Television, MySpace.com and Fox Entertainment Group.

In June Michael Pierce was appointed as a Vice President of Financial Planning and Analysis. Pierce was previously at Paramount Pictures and before that Sony.

 

MANAGEMENT TEAM

William J. Abbott – CEO
Andrew Rooke – CFO
Charles L. Stanford – Executive VP – Legal and Business Affairs
Edward Georger –  Advertising Sales, General Manager – Hallmark Movie Channel

 

STOCK ANALYSIS

 

 

 

 

 

Chart courtesy of stockcharts.com

 

CRWN’ 52-week low was $1.12 and the 52-week high was $3.23.  Right now the stock is trading at $1.21.  The 50-day moving average is near $1.28 a share and the 200-day moving average is at $1.45.  The company has a market cap of $435.2 million and 359.7 million shares outstanding.