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    Stock Alert for Spanish Broadcasting System Inc. (SBSA)

    Spanish Broadcasting System Inc. (SBSA) operate as a Hispanic-controlled media and entertainment company in the United States. It owns and/or operates 21 radio stations located in the top U.S. Hispanic markets of New York, Los Angeles, Miami, Chicago, San Francisco and Puerto Rico, airing the Tropical, Mexican Regional, Spanish Adult Contemporary and Hurban format genres. The Company operates three of the top six Spanish-language stations in the nation including the no. 1 Spanish station in America, WSKQ-FM in New York City. The Company also owns and operates MegaTV, a television operation with over-the-air, cable and satellite distribution and affiliates throughout the U.S. and Puerto Rico. SBSA also produces live concerts and events and operates www.LaMusica.com, a bilingual Spanish-English online site providing content related to Latin music, entertainment, news and culture.

    Share Statistics (23-Jan-12)   FY

    2009

    FY

    2010

    %

    Chg

    Q3

    2010

    Q3

    2011

    %

    Chg

    Symbol SBSA Revenue, $Mn 139.39 136.12 -2.3% 34.55 36.41 5.4%
    Current price $5.53 Gross marg. 70.3% 70.6% 0.4% 71.1% 76.0% 6.9%
    52wk Range: $0.95-$12.10 Oper. margin 22.0% 33.1%
    Avg Vol (3m): 80,976 Net margin -9.9% 11.0% -211.1% 8.9% 24.1% 170.8%
    Market Cap. 40.19M              
    Shares Outstanding 7.27M EPS, $ -1.33 1.01 -175.9% 0.26 0.87 234.6%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    Spanish Broadcasting System Inc. (SBSA) shares notched up a fifth straight day of gains, jumping as much as 43% to $6.27 Monday. Over 748 K shares have traded hands during the session, versus the 10-day average volume of just 70 K. SBSA shares have been on the rise since the company announced last week its preliminary fourth quarter 2011 results, which showed expectations of improved performance.

    Shares of the FL-based company have gained 94.7% in the last five days and 132.4% in the last month.  Year-to-date, the stock is down 41.2%.

    For the three months ended December 31, 2011, SBSA expects consolidated net revenue to be between $37.5 million and $38.0 million, resulting in expected growth of 7.5% to 9.0% over the comparable period in 2010. The Company expects a significant reduction in its television segment station operating loss, a non-GAAP measure, during the fourth quarter of 2011 compared to the fourth quarter of 2010.

    Operating income before depreciation and amortization, (gain) loss on the disposal of assets, net and impairment charges and restructuring costs, a non-GAAP measure, is expected to range between $10.5 million and $11.5 million, resulting in expected growth of 10% to 21% when compared to the fourth quarter of 2010.

    SBSA’s cash balance as of December 31, 2011, is expected to come in above $70 million.

    Raul Alarcon Jr., chairman and CEO of SBSA, cited continued benefits of a healthier advertising environment, the strength of the Company’s broadcasting properties and affiliated special events, and a singular focus on achieving profitability in its television segment.

    “We are further monetizing and expanding our audience reach, while effectively managing our costs, which is leading to increased cash flow from our business,” Alarcon said.  “Moving forward, we remain well positioned in the nation’s largest Hispanic markets and are focused on generating improved financial performance and long-term value.”

    SBSA shares added $1.15, or 26.3%, to close at $5.53.  The stock is currently above its 50-day and 200-day moving averages of $2.61 and $2.96, respectively.

    Source: http://finance.yahoo.com/news/Spanish-Broadcasting-System-pz-4249842859.html?x=0

    Financial Strength (23-Jan-2011)

    Company

    Industry

    Sector

    S&P 500

    Quick Ratio (MRQ) 1.28 1.13 0.73
    Current Ratio (MRQ) 0.27 1.70 1.38 1.11
    LT Debt to Equity (MRQ) 21.02 60.87 61.59 95.92
    Total Debt to Equity (MRQ) 589.26 66.39 102.05 135.11
    Interest Coverage (TTM) 2.02 0.64 0.34 26.24

    Source: Reuters.com, SEC Filings.

    Technical Analysis

    Source: http://stockcharts.com

    SBSA is above the upper Bollinger Band, implying that it is currently extended from its recent trend. Be aware, however, that a cross outside of the Bollinger Bands can sometimes be a signal of trend strength and not, necessarily, trend reversal.

    The MACD for SBSA currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0, which implies that the underlying moving averages are trending higher.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Jan23-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    Sirius XM Radio Inc. SIRI 2.10 7.87B 35.00 30.00 2.61 2.34
    Radio One Inc ROIAK 0.97 51.28M n/a n/a 0.14 0.12
    Broadcasting – Radio Median       12.43 n/a 1.02 n/a
    Spanish Broadcasting System Inc. SBSA 5.53 40.19M n/a n/a 0.25 0.22

    Source: Thomson Financial

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