Common Stock: R.C.N. Television
Current Market Price: $ 49,100 COP
Market Capitalization: $ 1.5 trillion COP
*All values in this article are expressed in Colombian Pesos (COP) unless otherwise noted.
**The bulk of this analysis is based on the company’s most recent audited financial report, which can be found by following this link.
R.C.N. Television Stock – Summary of the Company
R.C.N. Television is a Colombian television network. The company offers a wide range of programming, including telenovelas and sports. R.C.N. Television was founded in 1997 and is headquartered in Bogota, Colombia.
Revenue and Cost Analysis
R.C.N. had revenue of $ 349.5 billion in 2019, a slight increase compared to $ 343.3 billion in 2018. Their COGS was $ 301.2 billion in 2019, representing a gross margin of 14%, a significant improvement compared to a loss in 2018.
The company has had a net loss in both 2018 and 2019. In 2019 R.C.N. had a net loss of $149.4 billion, an improvement compared to a loss of $ 224.6 billion in 2018.
Balance Sheet Analysis
R.C.N. does not have a strong balance sheet. They have some long term assets, mainly property and equipment. But the company is leveraged, with high liability levels, including debt.
R.C.N. Television – Debt Analysis
As of year end 2019 R.C.N. has total debt outstanding of $ 279.9 billion, $ 17.7 billion of which is classified as current.
R.C.N. Television Stock – Share Dynamics and Capital Structure
As of year-end 2019 R.C.N. has 30.1 million common shares outstanding.
R.C.N. Television Stock – Dividends
The company does not currently pay a dividend.
R.C.N. Television Stock – 3 Metrics to Consider
Debt to Equity Ratio
Total Liabilities/Total Share Holder Equity
$ 525.9 billion / $ 288.7 billion = 1.8
A debt to equity ratio of 1.8 indicates that R.C.N. is leveraged and relies heavily on debt financing to fund itself.
Working Capital Ratio
Current Assets/Current Liabilities
$ 247.2 billion / $ 151.3 billion = 1.6
A working capital ratio of 1.6 indicates a sufficient, but not strong liquidity position. R.C.N. should not have problems meeting its near term obligations.
Price to Book Ratio
Current Share Price/Book Value per Share.
$ 49,100 / $ 9,590 = 5.1
R.C.N. has a book value per share of $ 9,590. At the current market price this implies a price to book ratio of 5.1, meaning R.C.N. Television stock currently trades at a significant premium to the book value of the company.
R.C.N. Television Stock – Summary and Conclusions
R.C.N. Television is not investable in my opinion. The company is in very poor financial health, consistently running a net loss and having significant debt outstanding. Furthermore the future of the television business is uncertain at best. Competing directly with companies like Netflix and Amazon for millennial clients is a tough place to be in the long run.
Investors would be better served considering Colombian companies in other industries, such as the Colombian infrastructure company Grupo Argos.
Disclaimer
This is not investment advice. Nothing in this analysis should be construed as a recommendation to buy, sell, or otherwise take action related to the security discussed. If I own a position in the security discussed, I will clearly state it.
This is not intended to be a comprehensive analysis and you should not make an investment decision based solely on the information in this analysis. I hope this serves as a useful starting point for a more comprehensive analysis, and hopefully draws attention to aspects of the company that were overlooked or merit further investigation. This is by no means intended to be a complete analysis. Again, this is not investment advice, do your own research.
