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Dish Networks: Building A Business Or Just Using Cheap Credit?

By Steven Carroll

As media companies move into telecommunications and as cable companies start producing their own content, it's easy to be confused as to which underlying business model is the winner. Such concerns certainly aren't reflected in Dish's (DISH) share price, which has rewarded shareholders handsomely over the last three years.

(click to enlarge)

Source: Thomson Reuters Eikon

Underlying factors

Unfortunately the price performance has largely been driven by multiple expansions, rather than by a spike in earnings - making the recent price action somewhat difficult to evaluate. The forward P/E has moved to a somewhat aggressive 43x forward earnings. Another way to view matters is that DISH's trailing five-year earnings growth is -1.2% per annum, while the market is now pricing in 27.4% per annum each year for the next five -- bullish indeed.

(click to enlarge)

Source: Thomson Reuters Eikon

A lonely space

Another interesting chart below… Read More …