Robeco Institutional Asset Management B.V. recently disclosed in its most recent Form 13F filing with the Securities and Exchange Commission (SEC) that it has sold approximately 8.0% of its holdings in DISH Network Corp. (NASDAQ:DISH), reducing its position by 23,586 shares during the fourth quarter, resulting in a remaining total of 270,181 shares of outstanding stock at the end of the reporting period, which is equivalent to a market value worth $3,793,000.
DISH Network Corp., a pay-TV services provider founded by Charles William Ergen and Cantey M., operates through Pay-TV and Wireless segments under DISH and Sling brands and wireless spectrum licenses, respectively. The company has been struggling as more customers switch to cheaper alternatives offered by streaming platforms such as Netflix Inc., Hulu LLC, and Amazon.com Inc.’s Prime Video.
Several brokerages have also downgraded DISH Network’s ratings due to their declining earnings. Morgan Stanley has lowered its price target from $17 to $10 per share and rated it as “equal weight,” while Barclays cut their forecast from $14 to $10 per share. Moreover, UBS Group recently downgraded DISH Network from “buy” to “neutral” rating and reduced its price objective from $27 to $10; JPMorgan Chase & Co. also decreased their price objective on DISH Network from $24 to $18 per share while retaining their “neutral” recommendation on the stock.
Despite this sell-off activity among institutional investors and subdued sentiment towards the stock by several investment analysts, some view this as an opportunity for long-term investors who have faith in Charles Ergen’s ability to innovate and turn around DISH Networks’ fortunes amid evolving technological trends within the media industry.
Accordingly, data compiled by Bloomberg.com shows that three analysts have given the stock a “sell” recommendation and five others have an issued a “hold” rating, while four experts have rated DISH Networks shares as a “buy,” with only one critical voice giving the company a “strong buy” recommendation. The consensus view is to stay put or hold off making any investment decisions until the dust settles and the media giant’s future growth prospects become clearer.
Investor Interest in DISH Network Corp Rises, But is it a Sound Investment Amidst Cord-cutting Trends?
DISH Network Corp, a holding company that provides pay-tv services through its DISH and Sling brands, has recently seen a flurry of activity from major investors. Institutional investors and hedge funds have either added to or reduced their stakes in the company. For example, US Bancorp DE raised its holdings in shares of DISH by 22.6% in the first quarter and now owns 3,166 shares worth $100,000. Covestor Ltd lifted its holdings by 268.9% during the same period to an amount of 889 shares worth $28,000 while Seaport Global Advisors LLC boosted its stake by 6.5%. Ellevest Inc., on the other hand, grew its DISH holdings by 63% during the third quarter. Glenmede Trust Co. NA lifted its stake in DISH by 2.6% in Q3 as well.
These institutional investments follow Director James Defranco’s acquisition of 500,000 shares on March 6th at an average cost of $10.88 per share with a total value of $5,440,000.00. Following the purchase, Defranco’s ownership ballooned to over $5 million (504,642 shares) in the company.
Despite all these buying activities from insiders and large investors alike over the past few quarters though , DISH stock opened at a mere $6.99 last Thursday-a far cry from its high of $29.60 recorded a year ago- prompting people to ask if it’s still a sound investment.
The good news? The company had reported earnings per share (EPS) totaling $1.47 for Q4 2020 which exceeded consensus estimates of just $0.47- quite an extraordinary feat that saw analysts revise their estimates upwards even after factoring in things like cord-cutting trends coupled with competition from streaming giants Netflix Inc., Amazon.com Inc., and Hulu LLC, among others.
Moreover, DISH boasts a market capitalization of $3.71 billion as well as an annual beta of 1.80, suggesting the stock is volatile but would yield decent returns if smartly invested in. As it stands, however, industry insiders hold just over 55% of the company’s stock- something likely to encourage more institutional investments in the coming months and drive up its price.
In conclusion, investor interest in DISH Network- both insider and institutional-based- has been on the steady rise since March this year. Lower purchasing costs have played a vital role in capturing investment attention from high-profile players like the US Bancorp DE, Seaport Global Advisors LLC and Covestor Ltd to Glenmede Trust Co. NA and Ellevest Inc.. However, given that business forecasts indicate that cord-cutting will continue to chip away at pay-tv subscriber base even as streaming platforms like Netflix continue to command the larger share of eyeballs,having a stake in DISH may prove profitable only if approached strategically.