NEW YORK, Nov. 4, 2004 (PRIMEZONE) -- The following is an investment opinion issued by Investrend Research Syndicate:
Investrend Research provider Fundamental Research Corp. has published a research note on VHQ Entertainment Inc. (TSE:VHQ). The report updates Fundamental's model and earnings estimates, and provides an analysis of VHQ's most recent results. The following is a summary of the 11-Page research note that is available for a limited time at www.fundamentalresearchcorp.com. Investors are encouraged to read the full report including important disclosures.
The research report notes that VHQ's FY2004 revenues and EBITDA were inline with Fundamental's expectations. However, margins came in below expectations due to various promotions, expansions, expenses related to the company's online initiative, and the unexpected write-down of movie and game assets. The analyst, Brian Tang, CFA, was encouraged by recent results showing Q1 2005 revenues up 14.8% over the same period last year, and strong same store sales growth in contrast to firms such as Blockbuster (NYSE:BBI) who reported negative same store sales growth over a comparable period.
The analyst revised downward his 2005 expectations and fair value. However, the report notes that industry fundamentals are positive, citing high, and growing, penetration rates for DVD players among other factors. The analyst believes that the stock is being weighed down by the overall sector which he believes to be out of favor citing low P/E multiples for VHQ's peers such a Blockbuster and Hollywood Entertainment. Fundamental believes that at these levels, VHQ is being mispriced by the market, and that VHQ presents a " . . . classic value/contrarian . . . " stock.
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The full report is available for a limited time at: http://www.fundamentalresearchcorp.com/PDF/vhqye2004q12005.pdf and www.investrendresearch.com , on each report and press release, investors are advised to read disclosures carefully and conduct their own due diligence or consult their advisor before making a decision.
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