One area of the market I have always avoided has been traditional media stocks. The chart here shows the drop in Reuters today because of its earnings news.This group is too hard to own. One part of this group is the newspaper stocks. There is visibility for the newspaper as we know it to disappear. I don't know the last time I bought a newspaper, I get what I need from the internet.
I don't have any data but I would not be surprised if magazine sales were less than they were a few years ago. At a minimum growth must be slower? At least that is my perception and so I avoid the group.
Reuters is sort of in this group providing news and financial information. I do not know the story but CNBC Europe has talked a lot today about a long run of revenue and earnings problems. Without knowing the story I think you can just apply a sniff test to this type of company to know it might have trouble delivering great growth.
2 comments:
Roger: RE - Media Stocks, interesting comment. I'm curious to know what your opinion is on stocks like TWX, DIS, and NWS.A, whcih are "traditional" media stocks as well. One particular note to comment upon: stocks like Gannett and Tribune own television stations in addition to their paper holdings in major markets. These companies also have an internet presence as well, with free cash flow and a dividend as a kicker. Again, I respect your opinion but, IMHO, some (not all) "traditional media stocks are worth a closer look as investments, if nothing else, and should not be shunned completely simply because of the advent of internet usage.
not with my clients money
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