Tune in to TiVo

05/14/2015 7:00 am EST

Focus: STOCKS

David Fried

Editor, The Buyback Letter

Every time you pause a live TV program, skip past the commercials, or automatically record a series, you can thank our latest featured buyback recommendation, notes David Fried, editor of The Buyback Letter.

We've bought and sold TiVo (TIVO) three times since August, so it's a familiar name to Premium Portfolio veterans. This global leader in the advanced TV entertainment market has risen to the top of our filters again.

TiVo developed the first commercially available digital video recorder (DVR), which supplanted the VCR in homes. The company offers the TiVo service and TiVo DVRs directly to consumers online, through third-party retailers and through cable, satellite, and broadcasting companies.

TiVo CEO and president Tom Rogers announced the company's new comedy collections, culled from ABC, CBS, FOX, and NBC, can be customized by TiVo subscribers into packages of favorite sitcoms and late night shows.

This will allow TV viewers who get content over the air without paying a cable company (cord cutters) to do their own bundling and curate their own content.

It's all possible because of TiVo's DVR for people who don't want to pay for a TV subscription, the $50 TiVo Roamio OTA ("over the air"). The limited edition launch last fall was successful, so expect to see a wider rollout in the US market this year.

In fact, TiVo announced it will make binge-watching even easier on Roamio, by the ability to search out episodes across multiple video apps, whether the shows are recorded, have yet to air, are on streaming like Amazon, Netflix, Hulu, etc. or are just coming soon to streaming. They all show up on one screen.

Time-shifting has become the norm for TV watchers, with about 71% of TV dramas watched from DVR recordings rather than live.

TiVo's strong position in the TV market combined with a large potential market have caused it to be mentioned as a possible takeover target for the likes of Microsoft (MSFT), Dell, Amazon (AMZN), Google (GOOG), Cisco (CSCO), Alibaba (BABA), or Apple (AAPL).

The company beat Q4 expectations. Revenue rose 9% year over year, to $91.7 million (EPS of 7 cents). TIVO has reduced shares outstanding by 21% in the past 12 months.

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