SwingTrade Member Forum

[Rawnoc]

Wise. I agree with your post. The risks are a concern which is part why Mike and I didn't make it a favorite until the price got to a level that those risks seem way overpriced in with a PE of less than 2.

(1) Balance sheet -- weak for a value play, but rapidly improving. They expect to pay down $400 million in debt over the next 2 years and the question of liquidity should be put to rest to quote the CFO in the C.C. -- they have ample liquidity for at least the next 2 years

(2) Changing environment -- they are embracing it by being the only multi-channel option where one person can perhaps have the option/freedom to get their DVD in the mail, exchange it in the store, then return it in a kiosk/vending machine and perhaps download a digital movie right from the kiosk. They appear to be firing on all fronts getting neck deep into on-demand, vending, & mail-order without having to make significant financial investments in any of these which is a win-win. Also, their big competitors aren't even attempting to enter the game area it seems which is a huge rental market for blockbuster which they plan to expand into mail-order, vending, and on-demand.