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Q: Tell us about some equity holdings.

A: The television market in general has very good fundamentals. This is a presidential- election year, and the expectation is this will be the biggest spending year ever for TV broadcasting in terms of advertising. We are long the equity of Sinclair Broadcasting Group [SBGI], which owns a string of television stations around the U.S. It's a well-managed company with strong free-cash flow. And they have been benefiting from retransmission.

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A good way to decide what to invest in is to take cue from insider purchases. Sinclair Broadcast Group has recently been the subject of insiders buying up shares.

Following years of inactivity, insiders have recently shown a lot of enthusiasm for Sinclair's shares. CEO David Smith bought 123,000 shares last week at a price of $7.90 to $7.99. Vice President Frederick Smith purchased more than 98,000 shares at a price range of $7.89-$8.00.

Sinclair beat Wall Street expectations in the third quarter with total revenues up 6% at $176.7 million. However, its net broadcast revenue from continuing operations was almost flat, and net income dropped 56% to $9.9 million, or 11 cents per share. Despite the decline in earnings, Sinclair raised its annual dividend by 10 cents to 70 cents per share, yielding an industry-leading 8.40%. Broadcast revenue was hurt by lower political advertisement spending as compared to 2006.

Despite the earnings decline in the third quarter, Sinclair's results were ahead of expectations. I expect the company to report improved revenue and earnings results for the fourth quarter. I am a fan of Sinclair for a couple of reasons.

TV broadcasters and print media companies have suffered a similar fate, with their advertisement revenue being eroded by the shift in advertising to the Internet. However, this year holds a lot of promise, with the upcoming U.S. presidential elections and the Beijing Olympics 2008. Sinclair, which claims to reach 22% of all U.S. television households in 35 markets, is in a strong position to benefit from these events. Referring to the opportunities being offered this year by the elections and the Beijing Olympics, Benchmark Co. analyst Edward Atorino, who has a buy rating on Sinclair, says he expects broadcast companies to "surprise people in terms of earnings growth."

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Upgraded by Bear Stearns from Peer Perform to Outperform

Cheap

Yield: 4.9%. Television broadcaster recently extended cable television service to 22 stations in 12 states.