The Wall Street Journal’s Heard on the Street Blog ticked off a number of reasons why investors should take a close look at LINTA, thanks to the “chugging-right-along” performance of QVC.  After a blip in 2008 when revenue dropped 6%, the retailer has rounded right back into form and now posts annual revenue gains in the mid-single-digit percentages.  Sure, TV shopping is a mature industry and cable households are not expected grow in coming years.  But QVC can reasonably expect to retain its mostly older cable-viewing demo for years, and is making headway in newer sales channels at the same time.  (In 2Q, the company generated some 35% of U.S. sales online.)

The beauty of the stock buy is this, according to Heard on the Street: “QVC faces minimal marginal costs when sales rise, giving it unusually high margins. Liberty’s earnings before interest, taxes, depreciation and amortization are nearly 20% of sales.  That compares with margins well below 15% for most retailers and department stores.  And among online retailers, even supersuccessful Amazon.com‘s margins are less than 5%.”  Despite the expected flattening of U.S. cable households, there is plenty of room for growth in Japan and Europe.  Here is the hopeful conclusion: ”Investors looking for a bet on a decent shopping turnout this Christmas should be switched on to Liberty Interactive.”  The Wall Street Journal Heard on the Street Blog  Oct. 26, 2011  Paid subscription may be required.