Tim Brown: Luck Be a Gray Lady
The point I'm trying to make is that the prospecting in the later rounds -- once the obvious choices are off the board -- is just like picking a winning stock. You need to not only look at the environment and the current talent, you also need to look at the intangibles and the opportunity to turn it around.
Today I'm picking the New York Times (NYT). It's a diversified media company that operates in two areas: news media and about group. The news media include The New York Times, nytimes.com, International Herald Tribune, The Boston Globe and Boston.com, as well as several other newspapers and related digital businesses.
When I look at the stats, there isn't a ton to cheer about. Its forward price-to-earnings is at 18%, which means many view it as being close to accurately valued. Its return on equity isn't at 10%. I look at its operating income and cash at $222 million and $41.7 million, respectively. Hmm...
However, it does have hefty institutional support at almost 87% and the price and brand are hard to argue with. The New York Times brand is one of the most recognizable newspaper and publishing names in the world. The Gray Lady is an institution. That alone is worth a tremendous amount.And the stock price has lost more than 40% of its value in the last year alone. It closed on Friday at $13.24. To put that in perspective, it hit its low in mid-July at about $12, but the levels we are seeing today are the lowest in more than a decade. Now is the time to buy a company like this that is really beaten down, but is a good value at this time. Draft the company to your roster and as always... Keep moving the chains! Keep up with the latest from Jim Cramer even when your time is limited. Just sign up for his free newsletter, "The Daily Booyah." You get quick-read recaps of Jim's popular "Mad Money" show, highlights of his videos on TheStreet.com, plus market commentary by Jim and other popular contributors on TheStreet.com. Sign up now (you may unsubscribe any time you like).
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