We reaffirm our long-term Neutral recommendation on
Scripps Networks Interactive Inc.
). The company reported strong financial results for second
quarter of 2013, beating the Zacks Consensus Estimate. We believe
the stock is currently fairly valued as it moved up nearly 33% in
the last year.
Why Kept at Neutral?
Scripps Networks is generating healthy growth in Advertising
and Affiliate-fee revenues at its flagship Lifestyle Media
businesses and higher segment profits. Scripps Network is
gradually diversifying into mobile platforms for its contents.
Additionally, the company is expanding its reach in Europe and
Asia through a series of takeovers.
We believe that both Advertising revenues and Affiliate fee
revenues will remain strong in the near future. The company
is expected to benefit as the U.S. housing sector is slowly
coming out of its prolonged downtrend.
Scripps Networks is a pure-play lifestyle cable network
consisting of six channels. All these cable channels have loyal
audiences, who also view Scripps Networks contents on several
non-TV platforms. This helps the company to explore the non-TV
verticals, such as magazines (print media) and websites
In the reported quarter, Scripps Networks improved with
respect to several financial metrics compared with the year-ago
quarter. The total revenue was up 10.7% and the total segment
profit was up 12.3%. Affiliate fee revenues were up 9.5% year
over year. Advertising revenues were up 9.9%.
Other Stocks to Consider
Scripps Networks carries a Zacks Rank #3 (Hold). Other stocks
in the media industry that warrant a look includes
Phoenix New Media Ltd.
Cumulus Media Inc.
LIN Media LLC.
). Phoenix currently has a Zacks Rank #1 (Strong Buy) whereas
both Cumulus and LIN have a Zacks Rank #2 (Buy).
CUMULUS MEDIA (CMLS): Free Stock Analysis
PHOENIX NEW MED (FENG): Free Stock Analysis
LIN MEDIA LLC (LIN): Free Stock Analysis
SCRIPPS NETWRKS (SNI): Free Stock Analysis
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