DHX Media’s (DHX Media Stock Quote, Chart TSX:DHX) share price may be taking it on the chin this year but some of those closest to the company think the stock has entered bargain territory.
CEO and board chair Michael Donovan and board member Johnathan Whitcher have both made recent purchases of DHX in the open market. On October 1 and 2, Donovan bought 262,000 common voting shares at an average price of $1.89 per share while between October 1 and 3 Whitcher picked up 480,000 variable voting shares at an average price of US$1.54 per share.
DHX has recently undergone a strategic review and some changes at the executive level along with cost cutting measures and a suspension of its dividend, all seen as part of an attempt to steer the company in the right direction as it contends with streaming video and changing dynamics in the media entertainment industry.
DHX released its fiscal fourth quarter financials last week, coming in with revenue of $97.4 million, a $10-million increase over FQ4 2017 and an EBITDA of $16.0 million, a $7.7 decrease over last Q4.
In response, Echelon Wealth Partners analyst Rob Goff lowered his one-year price target for DHX last week from $3.75 to $2.85 while maintaining his “Speculative Buy” rating. Goff says he remains optimistic that DHX can end up back in either flat or modest EBITDA growth in fiscal 2019.
“We maintain our view that DHX will move forward to monetize on the value of its library and portfolio strength through improved execution and partnerships,” says Goff. “We are optimistic that the further re-calibrations taken with the final results will set a baseline, where improved execution would potentially lead to outperformance. We further consider the potential for additional partnerships and sales to surface additional value, while strengthening its financial position.”
At press time, shares of DHX Media were up 1.51 per cent to $2.02.