Tag Archives: The Office

The New York Times: Buy, Sell or Pray?

Dating Mode


Case Study

Read the earnings release and translate what management is really saying. 1Q_2013_Earnings then view  NYT_VL.

Your assessment in a paragraph or two. This should take no more than fifteen minutes.  Would you buy, sell or pray?  What say you on the outlook for the “Grey Lady?”  Why?

Postscript: A reader submits an A+ response:

Nearly every metric that should be increasing has declined and vice versa.  Management is trying to put lipstick on a pig.  (CSInvesting: You have captured the jist!)

Print and digital advertising revenues decreased 13.3 percent and 4.0 percent, respectively, largely due to ongoing secular trends and an increasingly complex and fragmented digital advertising marketplace. In the first quarter of 2013, digital advertising revenues were $46.5 million compared with $48.5 million in the 2012 first quarter. Digital advertising revenues as a percentage of total Company advertising revenues were 24.3 percent in the first quarter of 2013 compared with 22.5 percent in the first quarter of 2012.

This paragraph really speaks to me.  Management admits that the business is fundamentally changing, and not necessarily for the better.  Ad rev was down even though it makes up a larger portion of overall revenue.  That says there are some fundamental issues with the industry.  NYT would have to go in the “too hard” pile, because based on this commentary, I don’t feel like I’d know where the business would be in 5 or ten years from now.  Also, ongoing pension funding cannot be a good thing.  I don’t think newspapers are going away, but they will become more of a novelty and read just because people “like the feel of holding a paper.”  I don’t like to read everything online, so I just print stuff out, but on occasion I like to pick up a paper copy of WSJ or Barron’s just for fun.  But that’s just me.  Also I felt like they were selling business lines and investments to stay afloat, i.e. sale of Fenway Sports units? (Clear the decks of the Titantic)

From Value Line:

  1. Sales per share: down every year since 2005.
  2. Cash flow per share: seems to have peaked in 2000 and been choppy with downward trajectory every year since.
  3. Dividend: eliminated in 2009 and no indication its coming back.
  4. Capital Spending per share: they did make significant progress in reducing spending by shifting to digital driven model around 08.
  5. Shares outstanding: share count higher now than it was in 2004. Margins: stayed the same even though cap ex decreased dramatically.

CSInvesting: I would mention the poor returns on capital for such a large and established business, sub 10% means that the market price should NOT be much above its asset value. Poor returns on assets means that growth won’t help increase value.

Business in secular decline, management has no clue to change that, but they will try obviously, poor returns on capital with increasing pressure on margins.

The person submitting the best reply gets to work here: 

Complete Video Clips Course on Trading, Value Investing and Corporate Finance

My father established our relationship when I was seven years old. He looked at me and said, “You know, I brought you in this world, and I can take you out. And it don’t make no difference to me, I’ll make another one look just like you.” –Bill Cosby

A Reader asks,”How can I learn about Wall Street and investing?”

My reply: Review and study the clips below–you will gain more than sitting in a classroom all day.

How auction markets work:http://www.youtube.com/watch?v=TSZKDkLgzhk

How investors think: http://www.youtube.com/watch?v=4zakyg3thfY

Price versus value: http://www.youtube.com/watch?v=jLo7tHDHgOc

Activist Investing and Corporate Finance: http://www.youtube.com/watch?v=p7rvupKipmY  Danny Devito:”I am not your best friend, I am your ONLY friend.”

How Wall Street REALLY works:


Act as if: http://www.youtube.com/watch?v=oTFU9c9MrkE&feature=related

Making the sale:http://www.youtube.com/watch?v=TXBgEpUlPVg&feature=related

Learn how to negotiate:http://www.youtube.com/watch?v=xT5iqTgypVs

Really study the above to gain the wisdom to retire rich: http://www.youtube.com/watch?v=mmMS9nvi6eg&feature=related

or go to traditional college and begin your career here: http://www.youtube.com/watch?v=rJB0CzlzSwY or work here:http://www.youtube.com/watch?v=bYhXeirfMp8&feature=related

WHY even go to college? http://www.jamesaltucher.com/2012/03/did-obama-really-say-he-wants-everyone-to-go-to-college/

It is your choice–YOU decide!  Let me know what happens.