The most hated presidential candidates may reward this company dearly

After Trump has secured his candidacy for the Republicans and Clinton is likely to win for the Democrats, they will be the most hated US president candidates in the history. I’m not interested in the politics at all but I cannot help but predict that these two will start a historical political drama not ever seen before in the US presidential election. It will be really an interesting saga to play out soon. You also have to understand, this election is not only to determine the US future for the next 4 years, but rather it will have a huge political impact for decades and generations. Why so? Well, believe or not the death of Supreme Court Justice Antonin Scalia on Feb 13, 2016 has effectively made the 2016 election the most important election of our lifetimes. The vacancy left by Scalia is  leaving the bench evenly split between liberals and conservatives in the Supreme Court. If you know anything about the US politics, you can easily understand that the Supreme Court virtually dictates the US political direction and as such this is monumental because Supreme Court justices, after all, have a lifetime appointment. That means the November election results could hand effective control of the Supreme Court to either liberals or conservatives for a generation – or longer. In addition to the Presidency, the 2016 election cycle will decide a staggering 12 governorships, 34 Senate seats, and all 435 U.S. House of Representatives seats. Therefore you can expect that the upcoming campaign and debates between Trump and Clinton will be extremely heated or red hot. This will lead to a huge uptake of the political adverstising. It is estimated that over $10 Billion will be spent for the election with roughly half for the broadcast TV and other half in the media including cable TV, digital, newspaper, radio etc.  So who will benefit from this humongous campaign money? You can bet that the traditional media heavy weights are among the big beneficiaries like CBS, FOX or Time Warner. But I think a much smaller media player, Gray TV Inc (GTN) will be the next huge winner in this battle. Don’t underestimate this rather small media company as it owns or operates 92 TV stations in 50 TV markets. As you can see its TV station map below, it covers the vast majority of the 50 US states with channels affiliated with a wide array of media giants, with FOX, ABC, CBS, and NBC.

At the current price of around $11, GTN is quite cheap:  at a forward PE of 14, it is much cheaper than its competitors (the industry average PE is about 22). However, the thing interests me most about GTN  is its technical setup: it seems to have come out of its bottom with an upward moving averages with a positive divergence in its momentum indicator. If it can only capture 10% of the projected over $10 billion ad spending in the coming election and its shares are simply moving towards its industry average PE, its share price will fly to the sky, potentially more than double from here.

Regardless which one is more hated between Trump and Clinton and which one finally wins, I think GTN will win a big time along with him or her! Of course, it is a speculative bet but I think it has a great risk reward ratio. Let’s try to earn some money while watching the historical drama with fun!!