Morningstar | Nine in a rating and revenue purple patch but beware sustainability and structural challenges.
An investment in Nine Entertainment requires weighing the strong positioning of its Nine Network division in Australian free-to-air television against the structural challenges facing the industry from proliferating competition for viewers and advertising dollars. We see competitive intensity continuing, preventing any sustained improvement in Nine Network's margins. The same can be said for the digital division, which operates in the equally competitive digital advertising space. However, Nine Entertainment has a strong balance sheet and is highly cash-generative. This provides management with significant flexibility, allowing it to invest in marquee television content, diversify into digital businesses, and engage in capital management initiatives. The group has been executing admirably to-date and culminated in the proposed merger with Fairfax announced in July 2018, using mostly Nine shares as consideration.Nine Entertainment Co. Holdings is engaged in the television broadcasting and program production and digital, internet, subscription television, and other media sectors. Co. manages its business based on two reportable segments: television, which includes free to air television activities; and digital, which includes its Nine Digital Pty Limited subsidiary and other digital activities.
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Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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