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Shaw Communications Slips to 52-Week Low on High Churn - Analyst Blog

Shares of Canadian cable multiple-system operator, Shaw Communications Inc.SJR lost 1.0% value yesterday, touching a 52-week low of $21.32. However, the stock ended yesterday's session a little higher at $21.47, demonstrating nearly 20% fall in the last six months.

Stiff competition is resulting in persistent video cable and video satellite customer loss. As of May 31, 2015, the video cable customer base totaled 1,881,547, reflecting a net reduction of 24,524 customers in the quarter. Also, video satellite customer counter decreased by 2,820 to 851,569. Digital phone line count totaled 1,341,734, reflecting a year-over-year reduction of 20,974 lines.

Considerable debt, escalating capital expenditure and a deteriorating cash position may act as headwinds moving ahead. At the end of the third quarter of fiscal 2015, Shaw Communications had cash and marketable securities of $227.7 million, down 55.7% and outstanding debt of $4,045.6 million, up 6.8% from the fourth quarter of fiscal 2014. The debt-to-capitalization ratio stood at 0.50 compared with 0.48 at the end of Aug 31, 2014.

For fiscal 2015, management expects both total revenue and operating income before amortization to grow 5-7% on a year-over-year basis. Meanwhile, free cash flow is likely to exceed $650 million.

Shaw Communications currently has a Zacks Rank #3 (Hold).

Stocks to Consider

Better-ranked stocks in this sector include Nippon Telegraph and Telephone Corporation NTT , BT Group plc BT and Comcast Corporation CMCSA . Nippon Telegraph and Telephone sports a Zacks Rank #1 (Strong Buy) while BT Group and Comcast hold a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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