An article on Folio Mag’s Web site is citing upward movement in media companies’ stock prices as a sign of potential improvement in the space. Touting the rise in companies like Time Inc. parent Time Warner (up 54% from its 52-week low), Martha Stewart Living Omnimedia (up more than 100%), and Meredith Corp. (up 98%), Folio’s Jason Fell explores potential reasons for improved investor expectations.
This piqued our curiosity, so we took a look at the S&P 500, a proxy for how well “the market” is doing as a whole. It’s up 46% from its 52-week low. So American stocks in general have been on a bit of a tear. In this light, Time Warner (which, by the way, also makes movies and operates HBO and Cinemax in addition to its publishing ventures) is up just a little bit more than the broad market. We wanted to make sure that this was a solid trend, so we took a look at the price action in a few more media companies.
Turns out, a portfolio of media stocks bought at their 52-week lows would leave an investor swimming in riches. (Of course, calling the bottom of a stock’s price is a fool’s errand, but we thought the same thing about investing in media companies generally.)
Assorted media stocks’ percentage gains as of today, vs. their 52-week lows.
• The New York Times: up 146%
• News Corp.: up 105%
• The Washington Post: up 49%
• Gannett: up 579%
• GateHouse: up 168%
• McClatchy: up 1351%
• Media General: up 378%
• Scripps: up 506%
• Lee: up 909%
• Belo: up 1040%
• Daily Journal: up 94%
• Tribune Co.: up 426%
That’s pretty astonishing, but there are also some mitigating factors.
Some of these stocks grew from lows that were frighteningly close to zero. GateHouse, for example, now trades at around 16 cents a share. Tribune Co. is currently in bankruptcy, and its stock trades on pink sheets, not an exchange. Here’s a 2009 Forbes article on McClatchy, titled “McClatchy Needs Mercy,” that says the firm is close to bankruptcy. The stock’s 52-week low: 39 cents.
To give an idea of the overall perception of media companies in 2009, here’s an Atlantic article that wondered aloud if The New York Times — America’s Paper of Record — could survive the downturn.
Many media companies have, like other U.S. companies, taken a step back from the brink brought on by the financial crisis and the recession. Many are neither expensive in outright stock price (Washington Post is a notable exception) or in market capitalization. As a result, they’re volatile, and as we noted, the entire stock market has seen a remarkable rise off its 52-week lows. We’re not out of the woods just yet.