No More Analog Over the Air Broadcasts 2009. Get Ready for Digital TV.

According to the www.dtv2009.gov website:

"At midnight on February 17, 2009, all full-power television stations in the United States will stop broadcasting in analog and switch to 100% digital broadcasting. Digital broadcasting promises to provide a clearer picture and more programming options and will free up airwaves for use by emergency responders."

In order to help consumers, the goverment is providing a TV Convert Box Coupon Program:

"Congress created the TV Converter Box Coupon Program for households wishing to keep using their analog TV sets after February 17, 2009. The Program allows U.S. households to obtain up to two coupons, each worth $40, that can be applied toward the cost of eligible converter boxes.

A TV connected to cable, satellite or other pay TV service does not require a TV converter box from this program.

Consumers have a variety of options. Options to explore include:
1. Keep your existing analog TV and purchase a TV converter box. A converter box plugs into your TV and will keep it working after Feb. 17, 2009, or
2. Connect to cable, satellite or other pay service, or
3. Purchase a television with a digital tuner. "

More information can be found in the DTV 2009 Website.

Can We Profit from This?

I'm still looking at more ways to profit from this trend, but we do know there is a solid trend from Analog to Digital TV.

In a previous blog, we mention a few initial stock options:

1. Corning (GLW) -- Used by Optical Networking and Flat Screen and High Definition HDTVs
   
2. Cisco (CSCO) -- Networking and Set-Top Box exposure.
   
3. NDS Group (NNDS) -- End to end digital technology and services to digital pay-television operators and content providers worldwide.
   
4. Harris Group (HRS) -- Has a Digital TV division and provides emergency communication equipment, broadcast communications and wireless networking.
   

We may revisit this topic some more at a later time.

Do you have any ideas you'd like to share?

Article on: "No Profit Bonanza Likely from TV Cutoff"

Informal Thoughts: Portfolio moves (August 8, 2007)

I'm going to start a new segment where I casually mention my thoughts regarding making moves in my portfolio(s) without worrying too much about organization.

I'm currently thinking of selling Shanda Interactive (SNDA). While I believe in growth in online gaming in China, I already have The9 Limited (NCTY), which is another Chinese Online Gaming Play. Shanda dropped 7.3% today on a strong up day. I see Shanda up 2.9% in after-hours.

But I'm thinking of rotating into other areas.

Some possibilities:

1. Add more to America Movil (AMX). Emerging Market Telecom has been doing great. I already have an overweight on America Movil and Emerging Market Telecom. Should I continue adding to it?

2. Add more Leucadia (LUK). Leucadia is an excellent company that many people call the mini-Berkshire Hathaway. It has excellent management, and recently jumped 7% on good volume to all-time highs. I've been holding on to this, and this company looks like a very long term holding. I'm not a deep value investor, so I'm giving the reins to the great management of Leucadia. I think this company will do very well.

3. Add more ABB (ABB). This is Swiss Infrastructure play is reasonably valued with respect to growth, near its all time high, and is part of the great Infrastructure Bull Market which is benefitting from great global growth.

4. Buy Finisar (FNSR). This is a speculative $4 stock that had been on a bullish ascending triangle pattern. While it has suffered from possible Nasdaq delisting, this stock may benefit from Cisco's (CSCO) good numbers as Cisco accounted for 22% of Finisar's sales last year. The stock jumped 11.88% today in a strong market and also because of an analyst upgrade. This stock is in the networking/optical networking area.


Running a Screen

In order to find more ideas, I'm also ran a stock screen:

1. Stocks with Forward PE < 20


2. Stocks with 5 year growth rate > 20


3. Stocks over their 200 day moving average

This screen is similar but less restrictive than my Cheap Growth Ready to Breakout Screen.

I saw several oil services stocks like National Oilwell Varco (NOV), but I didn't feel like adding to this because I already had Ensco (ESV), an oil driller.

AMX showed up on the list again, and so did ABB.

Rio Tinto (RTP) showed up on the list, but I already had Freeport McMoran (FCX).

I see Telekomunikasi (TLK), but I already was overweighted in emerging market telecom. I see Vimpel (VIP), a Russian Wireless Telecom company, but do I really want another emerging market telecom?

I see Public Service Enterprise Group (PEG), but I don't feel like getting into the utilities sector (I already have a utility).

I see Cummins (CMI), a company which "engages in the design, manufacture, distribution, and servicing of diesel and natural gas engines, electric power generation systems, and engine-related component products worldwide." That's a possibility.

I see Satyam Computer Services (SAY), which an Indian outsourcing company. But do I want another Indian company? I already have an Indian company. But this may be worth a look.

One company that fascinates me in this list is Harris (HRS). They operate in four segments: "Government Communications Systems, RF Communications, Microwave Communications, and Broadcast Communications." The stock is also near its 52 week highs. This company is less levered to the US Credit Crunch, and its customers include the military and government who need this technology.

There's Gildan Activewear (GIL), which looks to have a great PEG, and BE Aerospace (BEAV), a beneficiary of the boom in aerospace. I also see Transdigm Group (TDG), which I already own and is part of the boom in aerospace.

There are many other companies in the list, but I think I have more than enough choices right now.

Current Contenders in Todays Digital Living Room

When I say Digital Living Room, I am imagining a setup such as this:

1. High Definition TV Set
2. Comfortable seating to enjoy the Digital Living Room.
3. Broadband Connection.
4. A computer like device that interacts with the Broadband connection and the TV.
5. Interaction with a home network or an alternate computer (Optional)
6. Good sound system (nice, but not a requirement)

Before we get to the Digital Living Room of tomorrow, we have to look at today's technology and look at all the current contenders.

Contenders:

1. DVRs and Tivo (TIVO):

DVR is an acronym for Digital Video Recorders. While a VHS recorder recorded in a VHS tape format, the DVR records programs in a digital format in its internal hard drive. DVR's typically have a much better interface than the old VHS system. They normally incorporate a detailed Channel Guide, and a user can typically just choose which program to record very easily without having to manually set start and stop times. Certain other DVRs have much more user friendly features. Many offer to time delay live TV (want to pause the Big Game while you step out and pay the Pizza delivery guy? You can do that). Many offer you to easily forward through prorgams and commercials.

Tivo is a particular type of DVR (along with its software), and is often mentioned as the leader and innovator in the field. TIVO is publicly traded on the Nasdaq. Tivo has many other special features including a special program with Amazon to automatically download programs to the Tivo Box, and special features to access a networked PC's multimedia content including pictures.

2. Set-Top Boxes:

Many cable and satellite companies offer set-top boxes. These often connect directly to the broadband connection and the TV. They often translate the incoming signals (from Cable or Satellite) and send the data to the HDTV set including offering many digital channels and High Definition content. Some have the additional features such as offering video on demand. Some even incorporate a DVR to record programs in their internal hard drives.

DTV (Direct TV) and DISH (EchoStar Communications) are both satellite providers.

CMCSA (Comcast) is a cable provider who offers a set top box with video on demand, HD content and a DVR.

NNDS (NDS Group) and CSCO (Cisco, through their acquisition of Scientific-Altanta) are set top box makers.

T (AT&T) offers AT&T U-Verse, what they market as an IPTV solution. It offers similar functionality to Comcast who offer Video on Demand, Detailed Channel Guide and DVR capability.

Many other companies exist. What I list above are some examples.

3. Gaming Consoles such as Nintendo Wii, Sony PlayStation PS3, Microsoft Xbox:

Aside from being gaming consoles, these consoles can be entertainment centers as well. The PS3 contains a full Blu-Ray Player. Some people even choose to buy a PS3 not for the gaming capability, but to be able to watch Blu-Ray movies (can be cheaper than buying a dedicated Blu-Ray DVD player). The Nintendo Wii, even has the capability of integrating the Opera Internet Browser. Now, with the Nintendo Wii, you can browse the web using the Nintendo Wii controller from the comfort of your Living Room couch and enjoying a large screen HDTV set.

Microsoft (MSFT), Nintendo (NTDOY), Sony (SNE)

4. Windows Media Center

Windows Media Center is a Microsoft (MSFT) produced application that is designed to serve as a home entertainment hub. With tuner cards, Windows Media Center is capable of acting as a DVR. The Media Center can also have access to different media on the PC.

Working with a Windows Media Center Extender, media can be displayed on a display such as an HDTV set. Windows Media Center Extenders are "set-top boxes that are configured to connect via an Ethernet or Wireless network to a computer running Microsoft Windows XP Media Center Edition or Windows Vista Home Premium/Ultimate to stream the computer's media center functions to the Extender device. This allows someone to be able to use the Media Center and its features (such as view photos, videos, listen to music, watch live television and use DVR functions, watch recorded TV, etc.) on their television or other display device." (Wikipedia) The Xbox gaming console can act as a Windows Media Center Extender

5. Apple iTV:

Apple's iTV is a device much like a set-top box that connects directly to the HDTV set. This device can wirelessly (or through wires) sync up through a local computer which contains media including iTunes media. Now instead of watching the media in front of a small computer screen, this media can be viewed directly on an HDTV set in the living room.

AAPL is publicly traded on the Nasdaq.

6. Sling Media's SlingCatcher:

The company which brought you the SlingBox now brings you the SlingCatcher. This device can bring internet content to the Living Room HDTV display.

Sling Media is a privately held company.



More on this subject in the future.