Comcast hit new all time highs yesterday. Very positive on that company. Trading at 8 times EV/EBITDA when to me it should be trading at 12 times with a secular shift back to cable from satellite because of broadband. And NBC Universal competing very nicely with Disney in all areas, Movies, theme parks, Broadcast and cable networks. I think it is a $100 stock in the next couple of years. Disney is currently trading over 13 times EV/EBITDA and Charter is at about 12.5 times EV/EBITDA. Comcast should be on par with both. 12 times is reasonable. 8 times is not.
I am getting more positive on Sirius. Couple of hurdles to get over this year - Launch of Apple Music and Howard Stern contract renewal but I am positive on both. I think Howard re-signs with Sirius and Apple Music hits Spotify and Pandora in streaming without affecting radio listening. I am most positive on Sirius internet app being built into cars alongside the sat radio in SXM17. I see momentum going into 2017 and used cars helping for 10 straight years on sub additions. I think sub additions accelerate. We are a year and a half away from the beginning of 2017, and on my year end 2016 FCF per share projection of 30 cents I see a $6 price target in a year and a half. Not that far away. I see lots of upside here. They are growing FCF per share over 20% annually.
I saw a very successful mutual fund manager on CNBC this week say he is not in the business of owning fairly valued stocks. But he is in the business of owning undervalued stocks.
Personally I think over the next couple of years both Sirius and Comcast are going to be proven to be very undervalued at current prices. Especially with the buybacks happening with both.