Grupo Televisa (TV) is like having CBS, Comcast and 21st Century Fox tied together in one package; the company is the seventh-largest Mexican stock by market value with a stock in a nice uptrend, but far below earlier highs, notes Carl Delfeld, editor of Cabot Global Stocks Explorer.

The company owns an appealing group of businesses, including a dominant set of Mexican TV stations; a controlling stake in the country’s largest satellite TV business; and a 36% interest in Univision, the big U.S. Hispanic broadcaster.

It’s also Mexico’s top provider of cable TV services and has a profitable programming contract with Univision that is one of its most prized assets.

The company has assembled the largest cable business in Mexico, with about 20% of the pay-TV market. Satellite and cable TV are much more important than broadcasting and produce recurring revenue streams.

Cable is appealing because of ongoing subscriber growth, falling capital expenditures, and significant growth potential in data services, given the low penetration of high-speed Internet services in Mexico.

Its stock, currently trading at 10.65 per share, has seen better days and has struggled a bit with tough earnings comparisons in 2019 due to the Men’s World Cup in 2018.

But TV is still posting profits, with the stock in an uptrend, and it will benefit from easier comparisons in 2020. The last time the stock traded at these levels was in May 2004; it hit a high of 38 by June 2015.

While the Mexican economy and the peso have not been strong, Mexico should benefit from becoming a lower cost-manufacturing base than China and keep in mind that Mexican exports to America already contain 40% U.S. content while Chinese exports to America have only 4% U.S. content.

Finally, keep in mind that Mexico features very favorable demographics, where almost half of the country’s population is what we would term working age and 27% of Mexicans are under the age of 14. All of this is very positive for Grupo Televisa and TV stock and I encourage you to begin with a half position.

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