The UK’s largest commercial free‐to‐air broadcaster ITV plc (ITV) has announced plans to break the chains of the traditional “single revenue stream‐advertising” model of the Broadcasting sector. This timely announcement coincides with many of the leading Broadcasters due to update the markets on their financial performance.
In addition to ITV’s pay to view initiative, the company also reported earnings in line with forecasts, with revenues boosted by the World Cup. Data Explorers insight into market sentiment towards ITV shows that while the shares are down 5% from their monthly high last week, short covering has seen the percentage of shares outstanding halve from a 6 month high of 4% to 2% since mid‐June. Strong positive sentiment is evident over the same period, with institutional ownership amongst funds who lend having increased from 850 million to 1 billion.
Global giant, Liberty Global Inc (LBTYA) is subject to bullish trading with shares trading marginally below its 52 week high of $30 ahead of its second quarter earnings due today. However, is a price correction overdue? The Data Explorers proxy for short interest has been trending upwards over the past year increasing from 3% to 16% shares outstanding. In addition, utilization tracks a similar trend and indicates that at current 45% of the lendable supply is currently out on loan. This is a large position, but there is scope for more short selling before the stock is at strong risk of a short squeeze. Days to cover stands at a high of 12 days. However, it should be noted that this stock may be subject to convertible arbitrage.
Time Warner Cable Inc (TWC) completedits separation from Time Warner Inc (TWX) in early March last year and has recently announced its third dividend of the year. Both companies are due to report earnings this week with a confident outlook expected. Since the stock split, Time Warner Cable has seen its share price recover to levels traded shortly before the demerger. Demand to borrow is at a historic low of 2% of total shares as is utilization at 4%. Funds who lend own a steady 30% of shares in issue.
UK leading pay TV operators, British Sky Broadcasting (BSY) and Virgin Media (VMED‐US listed) reported strong quarter earnings last week reportedly driven by high consumer demand for HD and high‐speed broadband services. Short covering in BSkyB has seen the percentage of shares on loan fall to a low of less that 1%. Investors have taken a contrasting view of Virgin Media which has seen short interest holding steady at a 6 month high of 8%. Institutional ownership of Virgin Media stocks has declined from 90 million to 80 million over the past 3 months. However, this could point towards a more neutral sentiment as levels have seen a very gradual decrease since December 2009.
