Wednesday, June 6, 2012

Tilson Seeking Alpha Article on Grupo Prisa

It must be Whitney Tilson morning here at CVI.  Here is an article he just wrote for Seeking Alpha:

Grupo Prisa (PRIS.B) is a diversified media conglomerate with an excellent collection of assets but a weak balance sheet and the misfortune of doing most of its business in a troubled part of the world. Spain, which accounts for 61% of Prisa’s revenues, is going through a crisis that is even more severe than the one the U.S. went through in late 2008, so as the news has gotten worse and worse, Prisa’s stock has gotten clobbered. The B shares, which comprise the bulk of our position, closed last Friday at $2.65, down 45% year to date and down 75% in the past 12 months. The stock rose sharply yesterday, however, after the company announced a deal (discussed further below) that will significantly strengthen its balance sheet and demonstrates that the true value of the company is far higher than the current price. When things stabilize in Spain, we think the stock will likely be a multi-bagger from today’s depressed levels.

In light of the dire state of the Spanish economy, Prisa’s business is holding up remarkably well thanks to the quality of both its assets and management team: in Q1, revenues and adjusted EBITDA were only down 5.7% and 8.0% year-over-year, respectively (the earnings release is posted here.

Link to full article:

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