Shaw Communications Inc. BSJR

Morningstar Rating

Stock Research and Analysis

by Imari Love

Shaw has transformed from a cable television company to a diversified communications firm that has multiple revenue streams driving its long-term growth profile.

Shaw's customer base seems to be very enthusiastic about the prospects of digital cable, Read more

Bulls Say

In last spring's wireless spectrum auction, the firm was able to secure 20 MHz of spectrum at a 35% discount to the auction average.

Shaw's fiber-based network offers much higher speeds than the copper-wire-based infrastructure of its telecom competitors.

Despite the weak economic backdrop, Shaw has been able to grow its free cash flow by more than 30% year over year through three quarters. Read more

Bears Say

Shaw recently announced an offering that could start a price war with Novus; this could threaten the firm's near-term profitability.

Expenses are set to rise given inflation in Western Canada, a facility upgrade, and employee hiring (9,000 employees now, soon to be 10,000).

The CRTC (Canada's telecom and broadcast regulator) recently levied two new taxes on TV consumers that could slightly hinder the firm's subscriber growth. Read more

Strategy

Shaw's focus is growing free cash flow through leveraging its network to present a diversified offering, by providing best-in-class service, sound capital management, and operational efficiency. Read more

Management

The Shaw family controls nearly 80% of the voting shares but less than 10% of the firm's equity. We don't care for dual share classes because they typically reduce the influence minority shareholders have over corporate activities. In Shaw's case, minority Read more

Profile

Shaw Communications, Inc., a diversified communications company, provides broadband cable television services, Internet, digital phone, Direct-to-home (DTH) satellite services, Read more

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