Looking for value? Look at TIVO.

TIVO … rarely does one word mean so much. It represents one of those rare occasions when the brand defines the product (like “Q-Tip” did for cotton swabs or “Coke” did for soft drinks). Did you know that a TIVO is actually a type of digital video recorder or DVR? On top of this, users have a cultish loyalty to their TIVO. Never, and I do mean NEVER would a TIVO user change to a competing product. Even Microsoft’s foray into DVR’s with ReplayTV was a failure. Go ahead ask a TIVO user how they feel about their TIVO. You will inspire an impassioned soliloquy about how TIVO has reinvented television much the way color did decades ago.

So why is it that most people would pay more for a used Q-Tip and a warm Coke than they would for a share of TIVO stock? I think it comes down to management. Speaking of brands with a cultish following, Apple’s iPod has just such a rabidly loyal consumer base. Yet that brand has single handedly raised the fortunes of struggling company. According to Interbrand’s annual survey, Apple’s brand value increased 23.7% to 6.9 billion… with a B. Poor TIVO on the other hand has managed to allow their market cap to dwindle to $285 million.

Again, the only explanation that I can determine is management. So hopefully, the “resignations” of both the president and the CEO will be a step in the right direction to developing the incredible potential that I think this stock holds. In the near term I expect to see one of the large cable companies or satellite providers to add this valuable brand to their stable (are you listening Rupert Murdoch). They could also learn something from TIVO in terms of functionality (are you listening Cox Communications). If however, the company continues on its own, I think the sky is the limit with the right management team. Either way TIVO offers tremendous value for investors at its current valuations. I will and am buying this stock in the $3 to $5 range.