HSNI

HSN Inc.

Consumer


Presented:01/07/2015
Price:$75.64
Cap:$3.96B
Current Price:$40.35
Cap:$2.12B

Presented

Date01/07/2015
Price$75.64
Market Cap$3.96B
Ent Value$4.10B
P/E Ratio24.73x
Book Value$10.47
Div Yield1.9%
Shares O/S52.37M
Ave Daily Vol320,000
Short Int3.27%

Current

Price$40.35
Market Cap$2.12B
HSN, Inc. operates as an interactive multi-channel retailer in the United States. It operates through two segments, HSN and Cornerstone. The HSN segment offers jewelry, apparel and accessories, beauty and health, and home products, as well as household, home design, electronics, culinary, and other products through television home shopping programming broadcast on the HSN television networks, the HSN.com Website, mobile applications, and outlet stores. The Cornerstone segment provides home furnishings, including indoor/outdoor furniture, home décor, tabletops, textiles, window treatments, and other home related goods under the Frontgate, Ballard Designs, Grandin Road, and Improvements brands; and apparel and accessories under the Garnet Hill, TravelSmith, and Chasing Fireflies brands. This segment operates 8 e-commerce sites; distributes approximately 320 million catalogs; and operates 10 retail and outlet stores. The company markets and sells a range of third party and private label merchandise directly to consumers. HSN, Inc. was founded in 1981 and is headquartered in St. Petersburg, Florida.

Publicly traded companies mentioned herein: HSN, Inc. (HSNI), Liberty Interactive Corp (QVCA)

Highlights

HSN, Inc (HSNI) is the 2nd largest home shopping entity, and operates in a “rational duopoly” with Liberty’s QVC (Liberty Interactive also owns 38% of HSN). The presenter thinks HSNI is running a great business, and is long the stock at present levels (~$74). The “boundaryless” retailer runs an asset light model and its cash conversion is excellent. In addition, return on capital metrics are very good, and sit among the best in the class. As he contemplates the future of retail, the presenter sees HSNI as extremely well positioned to benefit from the digital trend and thinks shares are likely to rise as free cash flow compounds at an attractive rate.

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Idea Discussion

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