It's been a tough few years for the newspaper industry. But
The New York Times Company
(
NYT
) is expected to see earnings growth in 2012. This Zacks #1 Rank
(Strong Buy) is also a value stock, with a forward P/E of just
11.3.
The New York Times is a multimedia news operation which operates
The New York Times, the International Herald Tribune, The Boston
Globe, NYTimes.com, BostonGlobe.com, Boston.com, About.com and
other properties.
Big Beat In Q1
On Apr 19, The New York Times reported first quarter results and
crushed the estimate by 300%. Earnings per share were 8 cents
compared to the 2 cent estimate. That was also much better than the
first quarter of 2011 where the company made zero cents.
Revenue actually decreased by 0.3% to $499.4 million from $500.7
million as advertising revenue fell 8.1%. However, the company is
making it up in circulation, as it expands its digital subscription
base. Circulation revenue climbed 9.7%.
The company recently switched from 20 free monthly articles for its
flagship The New York Times to just 10 articles which is spurring a
greater number of people to subscribe digitally (myself included.)
Since the end of the fourth quarter of 2011, paid subscribers to
various digital subscription packages of The New York Times and the
International Herald Tribune rose 16% to 454,000. Paid
subscriptions to BostonGlobe.com and The Boston Globe jumped 13% to
18,000.
Outlook For Q2
Advertising revenue in the second quarter is expected to remain
similar to that of the first quarter.
But total circulation is expected to increase in the high-single
digits due to growth in digital subscriptions as well as print
price increases implemented in the first half of 2012.
Zacks Consensus Estimate Rises For 2012
Over the last 60 days the 2012 Zacks Consensus has increased 2
cents to 71 cents.
This is earnings growth of 5.5% as the company made 67 cents in
2011. That is higher than the average growth in the industry which
is just 4.2%.
Shares Beaten Up
After hitting new highs in 2011, shares have sold off in 2012 with
the exception of a very recent bounce back.
Even with the recent rally, The New York Times still has plenty of
value.
Along with a P/E under 15, which is the cut-off I use for value, it
also has a price-to-book ratio of 2.1. A P/B ratio under 3.0 can
indicate value.
The company also has other solid fundamentals including a 1-year
return on equity (ROE) of 18.8%.
For investors looking for a value stock in the media space, they
should consider a look at The New York Times.
This Week's Value Zacks Rank Buy Stocks
It has paid to own department stores since the Great Recession.
Dillard's Inc.
(
DDS
) recently reported record first quarter results and is expected to
grow earnings by 37% in fiscal 2012. Despite shares near multi-year
highs, this Zacks #1 Rank (Strong Buy) still has value with a
price-to-sales ratio of only 0.5.
Read the full article.
Intersections, Inc.
(
INTX
) is cashing in on the growing awareness surrounding identity theft
as it's expected to grow earnings by the double digits in 2012.
This Zacks #1 Rank (Strong Buy) has value with a price-to-sales
ratio of only 0.8.
Read the full article.
I can't believe I'm writing about another airline but
Spirit Airlines
(
SAVE
) has game. It is expected to post double digit earnings growth in
2012 and is also a value stock. This Zacks #1 Rank (Strong Buy) has
a forward P/E of just 10.5.
Read the full article.
Tracey Ryniec is the Value Stock Strategist for
Zacks.com
. She is also the Editor of the Turnaround Trader and Insider
Trader services. You can follow her on twitter at
@TraceyRyniec
.
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