Saturday, September 12, 2009

Barron's: Revival in advertising

They give you the traditional beneficiaries like DIS, NWSA, TWX, GOOG and they end with this:

Media companies rallied nicely Thursday after Goldman Sachs analyst Mark Wienkes raised his rating on the group to Attractive from Neutral, pointing out that advertising revenue at cable networks is expected to increase 6% from the level a year ago, as national advertising outpaces local advertising. Wienkes' favorite is Time Warner because of its HBO, TNT and TBS cable networks, which stand to gain from strength in national advertising. He noted, too, that Time Warner trades at a discount to the entertainment group.

Indeed, for all the losses suffered by newspaper, magazine and broadcast TV advertising, other parts of the ad industry look more than ready to shine. According to Veronis Suhler Stevenson, cable television and entertainment media will help make the broader communications sector the third-fastest growing segment of the U.S. economy in the next five years, behind mining and construction.


Anonymous said...

with ads away from newspapers...would this hurt GCI?

Palmoni said...

I don't think that's going to happen. They all have websites that delivery news besides the papers. Remember they also own CareerBuilder and ShopLocal.

On their last quarter the "digital" business made $18 million--That biz should be a third of their profits in Q3, with maybe 12% of the revenue. Television ad budgets are going up--they own close to 25 TV stations, and they make $50 a quarter.

When newsprint gives any hint of a turnaround, the stock will rock.

I thought the article was a positive for GCI. Gannett still has a ton of assets, and the selling on Friday after it gapped up was just an attempt to make it look like their was real selling in the stock.

It wasn't. It was just the algorithm traders trying to make the charts say something.

These algo traders did that to MGM on Sept 1--and it bit them in the face.

I think the stock trades up.

Anonymous said...

thanks P for your insight...lots of people point to USA Today with GCI and forget about the other assets. Although USA today is at all the hotels and probably the most read.

do you ever rest? ie enjoy the weekends? your really quick with responses and post.

i really enjoy this blog...please keep it coming