Steady Rise, page-29

Broker targets range from 0.90 to $1.15. Consensus dividend is above 10% for the FY2017 and 2018, which are more than covered by both profits and cash flow.

Weakness in traditional TV due to competition for content and consequential impact on advertising revenues are material negatives. I do not expect this to change anytime soon. Current share pricing assumes negative value for STAN – if STAN can become cash flow positive, then the valuation risk is to the upside. If not, then it is difficult to see where the growth will come from. However, given the near term dividends and the balance sheet strength, investors are being well paid to be patient and wait for developments.

The wildcard is regulatory reform – something that is long overdue – which would provide a significant uplift in the share prices of all (?) traditional media companies. Given the politics involved, I am not holding my breath.

Lastly, Macquarie has been a big seller of NEC shares. The last filing (in early February) showed they had reduced their shareholding by around 10 million shares. In the context of the typical daily volume for this stock, that is a large number and must have had downward influence on the share price.

At current prices, I consider NEC somewhere between a firm hold and a marginal buy. If it does drop back to 0.90, absent any other developments, I would consider adding to my modest existing holding.