NLSN

Nielsen Holdings PLC

TMT


Presented:09/26/2018
Price:$27.96
Cap:$9.96B
Current Price:$27.98
Cap:$9.96B

Presented

Date09/26/2018
Price$27.96
Market Cap$9.96B
Ent Value$19.49B
P/E Ratio26.88x
Book Value$11.40
Div Yield5.01%
Shares O/S356.23M
Ave Daily Vol6,007,580
Short Int9.87%

Current

Price$27.98
Market Cap$9.96B
Nielsen Holdings Plc engages in the provision of global marketing data collection and analytics services. It operates through the Watch and Buy segment. The Watch segment offers services to media and advertising clients and audience measurement services. The Buy segment provides consumer packaged goods to manufacturers and retailers. The company was founded by Arthur C. Nielsen in 1923 and is headquartered in New York, NY.

Publicly traded companies mentioned herein: Amazon.com Inc (AMZN), Blackstone Group LP (BX), comScore Inc (SCOR), Netflix Inc (NFLX), Nielsen Holdings PLC (NLSN), Partners Group Holding AG (PGHN SW), Verisk Analytics Inc (VRSK), Walmart Inc (WMT)

Highlights

Nielsen’s (NLSN) “Buy” segment - ~20% - 25% of EBITDA - has faced significant growth headwinds for years. Meanwhile, its “Watch” business, which has a monopoly position in TV audience measurement/data, generates 75% - 80% of EBITDA, is in a good position to regain its “luster” as a high quality business/asset. Given how negative sentiment is around Nielsen’s future, the depressed multiple(s) the stock trades at (~9x EV/EBITDA and ~12x P/E on consensus ‘19 numbers), and a credible turnaround plan for the Buy segment, the presenter is comfortable with the risk/reward setup and a contrarian long position at $27/share. He noted that IRI, NLSN’s main competition on the Buy side of the business, may be acquired by Partners Group for just over $2B, so a sum-of-the-parts (SOTP) model for NLSN suggests Watch is massively undervalued relative to any peer in the comp set today. If the bullish assessment of the situation is accurate, patient shareholders will collect a 5% yield while the stock trades back up into the $30s over the next 12 - 18 months. Longer-term, the stock would be more fairly valued in the $40s; however, the company could be viewed as a strategic asset to any number of players in the media space, so there is optionality around a potential takeout.

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