Join        Login             Stock Quote

This "Comeback" Stock For 2012 Could Jump 50%

 December 13, 2011 02:37 PM

Just because you develop a popular new technology, there's no guarantee you can control its destiny. Digital video recorder (DVR) pioneer Tivo (Nasdaq: TIVO) convinced cable companies it's program-recording devices would revolutionize viewing habits, as it was far more functional than a plain-old VCR.

Since its founding in 1997, the company quickly gained traction, hitting almost $100 million in sales by fiscal (January) 2003, roughly $275 million by fiscal 2008, with expectations of reaching $500 million in annual sales by the current fiscal year.

But cable operators had another idea. Time Warner Cable (NYSE: TWC) and other large cable companies decided to go with cheaper DVR devices made by firms such as Cisco Systems (Nasdaq: CSCO) and Motorola Mobility Solutions (NYSE: MMI).

As a result, Tivo's sales have been falling ever since, and investors began to wonder whether the company would even be around a half-decade from now. Well, that obituary was premature. Tivo recently delivered a surprisingly strong quarter, fueled by better-than-expected new subscriber gains.

[Related -Citrix Systems, Inc. (NASDAQ:CTXS): A Look At Opportunities And Threats]

[Related -TiVo Inc. (TIVO): A Solid Play In Advanced TV Space]

In the quarter ended October, Tivo showed sequential gain in net new subscribers for the first time in almost two years. And analysts say the numbers will look even better in the quarters to come.

A shift to the second tier
Tivo grew frustrated in its dealings with the largest cable operators (known as MSOs), which were hammering the company on price. A refusal to cut prices sharply led to terminated contracts, so Tivo's management decided to focus on second-tier MSOs. Smaller MSOs lack the engineering resources to deliver the robust technology Tivo has developed. The move seems to be paying off now.

For example, United Kingdom's Virgin Media, which has more than 2 million subscribers, has paired up with Tivo.

Next Page >>12


Comments Closed

rss feed

Latest Stories

article imageThe April 29 Gold Triangle Breakout Update

If you’re just watching stocks, you may be missing this powerful Triangle Breakout surge in read on...

article imageSell In May, But It Is A Presidential Election Year

With May just around the corner, articles covering the "Sell in May' phenomenon are not in short supply and read on...

article imageWhy We're So Unhealthy

That America is in the throes of a systemic health crisis can no longer be denied. According to the U.S. read on...

article imageTackling China's Debt Problem: Can Debt-Equity Conversions Help?

China’s high and rising corporate debt problem and how best to address it has received much attention read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.