Digest: TW shares 'inexpensive'
EmptyShares of Time Warner Inc. rose 2.2% on Tuesday to $20.52 after Citigroup said investors are undervaluing the stock after the company spun off Time Warner Cable, the second-largest cable operator in the country. Citigroup analyst Jason Bazinet said TW's remaining assets are "inexpensive" and predicts the stock can add about 20% in the next year. He rates it "buy" and assigns a price target of $24. "To our surprise, the pullback in Time Warner shares is almost exclusively tied to movements in Time Warner Cable," Bazinet wrote. "In effect, Time Warner is trading just like a cable stock."
Sat radio merger 'ludicrous'
A report released Tuesday by media research company the Carmel Group calls arguments in favor of a combination of Sirius Satellite radio and XM Satellite Radio "ludicrous" and "selfish." Opponents of the proposal, including the National Association of Broadcasters, which retained the Carmel Group's services, said the deal will create a monopoly. In addition, the Carmel Group argued that approval of the deal could set a precedent for cable operators and other industries seeking to consolidate. The research firm is known for helping to kill the 2003 combination between satellite television companies EchoStar Communications Corp. and DirecTV Group Inc.