A Watchdog Guide For Media Stocks

by Louis Navellier | November 7, 2012 10:30 am

It seems like every second of airtime and every square inch of newspaper was jam packed over the past year with campaign messages and updates on the election. I know you’re probably feeling just as bombarded as I am, so now that the election is over, I’m going to give you a break from politics.

At this point I want to redirect your attention to the media itself and whether there are any viable investing opportunities in this sector. Many of us are familiar with the major web, print and broadcast players in the U.S.—Fox News, CNN NBC, The Wall Street Journal, The New York Times, but fewer understand which conglomerates are responsible for which media outlets. So let’s go ahead and assess the profit potential of several of the largest media groups in the country:

Company Ticker Owns Recommendation
Comcast CMCSA[1] National Broadcasting Co. (NBC) (partially) Strong Buy[2]
Gannett GCI[3] USA Today Buy[4]
General Electric GE[5] National Broadcasting Co. (NBC) (partially) Buy[6]
News Corp. NWSA[7] Fox Broadcasting Co. and The Wall Street Journal Buy[8]
New York Times NYT[9] The New York Times, The Boston Globe and the International Herald Tribune. Hold[10]
Thomson Reuters Corp. TRI[11] Reuters Sell[12]
Time Warner TWX[13] Cable News Network (CNN) Buy[14]
Walt Disney DIS[15] American Broadcasting Co. (ABC) Buy[16]

Of course, if you want to know my opinion, the biggest profit opportunities in media aren’t with these huge conglomerates but rather with a handle of smaller and more nimble regional players—in particular, LIN TV (NYSE:TVL[17]) and McClatchy (NYSE:MNI[18]). Both of these companies were strong enough to survive the shakeup as subscribers demanded more internet-based options from both newspapers and news channels.

In the case of Lin TV, this company operates upwards of 40 televisions stations nationwide as well as a few dozen news sites and mobile products. Because this company has so effortlessly made the transition to web, it is headed towards 27% sales growth and a whopping 467% earnings growth this quarter. In fact, the only real area for improvement for Lin TV is its return on equity. TVL is currently a strong buy[19].

As for McClatchy, this is a American publishing company that runs 30 daily newspapers across 15 states—including The Sacramento Bee. This company has also embraced digital media as it also operates several websites and mobile news applications.

On top of this, it also owns a minority state in CareerBuilder LLC—the operator of CareerBuilder.com. This diversified news company outperforms the industry average in terms of earnings growth, long-term growth rate and return on equity. MNI is also a strong buy[20].

So as with many things, when it comes to investing in media plays, bigger isn’t always better.

Endnotes:
  1. CMCSA: http://studio-5.financialcontent.com/investplace/quote?Symbol=CMCSA
  2. Strong Buy: http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=CMCSA
  3. GCI: http://studio-5.financialcontent.com/investplace/quote?Symbol=GCI
  4. Buy: http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=GCI
  5. GE: http://studio-5.financialcontent.com/investplace/quote?Symbol=GE
  6. Buy: http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=GE
  7. NWSA: http://studio-5.financialcontent.com/investplace/quote?Symbol=NWSA
  8. Buy: http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=NWSA
  9. NYT: http://studio-5.financialcontent.com/investplace/quote?Symbol=NYT
  10. Hold: http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=NYT
  11. TRI: http://studio-5.financialcontent.com/investplace/quote?Symbol=TRI
  12. Sell: http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=TRI
  13. TWX: http://studio-5.financialcontent.com/investplace/quote?Symbol=TWX
  14. Buy: http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=TWX
  15. DIS: http://studio-5.financialcontent.com/investplace/quote?Symbol=DIS
  16. Buy: http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=DIS
  17. TVL: http://studio-5.financialcontent.com/investplace/quote?Symbol=TVL
  18. MNI: http://studio-5.financialcontent.com/investplace/quote?Symbol=MNI
  19. TVL is currently a strong buy: http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=TVL
  20. MNI is also a strong buy: http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=MNI

Source URL: http://investorplace.com/2012/11/a-watchdog-guide-for-media-stocks-cmcsa-gci-ge-nwda-nyt/
Short URL: http://invstplc.com/1nygCL0