4 Media Kings You Should Sell
07/01/2011 11:30 am EST
Even though there aren't many media companies left, after all the mergers of the last several years, the ones that have stuck around aren't doing very well this year, writes Louis Navellier of Blue Chip Growth.
In the past decade, a wave of mergers has created a landscape dominated by just a handful of key players. These behemoths rule over TV, radio, newspapers, and just about every other form of media, and we are loyal subjects of their popular culture.
However, when it comes to their stocks, investors would be wise to stage a revolt. Each media stock on our list is well off its 52-week high, and continuing to fall without a turnaround in sight.
Here are four media stocks to sell…
Walt Disney Co. (DIS)
Disney is split into five different business segments: media networks, parks and recreation, studio entertainment, consumer products, and interactive media. In addition to its global presence and celebrity, DIS stock boasts a market cap of over $72 billion.
However, just because your children own every Disney movie (not to mention the accompanying merchandise) doesn’t mean you should own its stock. DIS stock is basically flat for 2011, and is down more than 15% from its 52-week high, which was reached in early March.
Looking at its last income statement, DIS posted a quarterly earnings decline of 1%, year-over-year. Sell now before this stock continues to drop.
News Corp. (NWSA)
This diversified global media company operates in eight media segments, including filmed entertainment, television, cable network programming, direct broadcast satellite television, integrated marketing services, newspapers and information services, and book publishing.
Most prominently, News Corp. owns the Fox networks and The Wall Street Journal.
NWSA stock has dropped 11% since reaching its 52-week high at the end of May. Earnings-wise, analysts are projecting no growth in EPS this quarter. In its latest income statement, the company reported quarterly earnings growth of negative-24% and a quarterly revenue fall of 6% year-over-year.
Time Warner (TWX)
This firm, which is known for its cable -television networks, feature-film production and magazine publishing, formed when Warner Communications and Time Inc. merged, and later came a mega merger with AOL.
Its brands include TNT, TBS, CNN, HBO, Cinemax, Warner Bros., New Line Cinema, People, Sports Illustrated, and Time.
TWX stock has slid 10% from its 52-week high, which was made in February. In its latest income statement, TWX posted quarterly earnings growth of minus-10%, year-over-year. TWX defenders might point to the company’s dividend—but at just a 2.6% yield, it doesn’t turn many heads.
Thomson Reuters Corporation (TRI)
This company provides information for businesses and professionals across the world. Its major businesses include Thomson Reuters Eikon, Reuters 3000 Xtra, Lipper, Elektron Datascope, Datastream, Thomson One, Westlaw, ONESOURCE, Derwent World Patents Index, Thomson Reuters Pharma, Thomson Reuters Web of Knowledge and Web of Science, and Thomson Reuters Integrity.
TRI stock has fallen 15% from its 52-week high, which was made in early February, and is approaching its 52-week low at $33.68. Year-to-date, the media stock is down 6%.