By right direction, I mean the company's stock price. Not the company itself.
Indeed, I think DirecTV Group (DTV/NYSE) being controlled by Rupert Murdoch is a great thing (in contrast to my less-than-effusive endorsement yesterday over the speculation that he could buy the Financial Times). Murdoch might have a record of dumbing down newspapers, but his people know how to run satellite companies.
And maybe the market is starting to see that.
I notice that DirecTV is trading north of my $15.50 entry price of last July 21. It could always drift back down, of course, leaving my stake underwater again. (I added to my stake three times, in August, October, and November.) But recall that there were two factors hampering the company's prospects with Wall Street.
First is the fact that the company basically subsidizes subscribers for their first year. This gave the impression that the company had little free cash flow. But DirecTV announced 2005 results last month that beat analyst expectations and at the same time announced a $3 billion stock repurchase plan to be spread out over two years.
The second factor hampering DirecTV's stock performance has been the "overhang" of shares held in the General Motors pension plan. GM holds roughly 215 million DirecTV shares. But yesterday DirecTV announced plans to buy 100 million of those shares from GM for $15.50 each in a deal scheduled to close on Friday.
That's a positive and more than half of the $3 billion in projected stock repurchases.
To be sure, there are still perception problems to overcome. Management needs to prove that "churn" won't be a problem. And there's still another 115 shares being held by GM. And, needless to say, nothing goes straight up.
DirecTV has been in the portfolio for less than a year and this is a long-term investing portfolio. So we're still in early innings with this pick.
Let's stay tuned.