McClatchy Company Stock Downgraded (MNI)

NEW YORK ( TheStreet) -- McClatchy Company (NYSE: MNI) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Media industry average. The net income has decreased by 6.4% when compared to the same quarter one year ago, dropping from -$1.96 million to -$2.09 million.
  • MNI has underperformed the S&P 500 Index, declining 22.26% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • MCCLATCHY CO reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, MCCLATCHY CO increased its bottom line by earning $0.64 versus $0.39 in the prior year. For the next year, the market is expecting a contraction of 26.6% in earnings ($0.47 versus $0.64).
  • MNI, with its decline in revenue, underperformed when compared the industry average of 19.4%. Since the same quarter one year prior, revenues slightly dropped by 5.1%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • 49.40% is the gross profit margin for MCCLATCHY CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -0.70% is in-line with the industry average.
.

The McClatchy Company operates as a newspaper publisher in the United States. The company's newspapers include The Miami Herald, The Sacramento Bee, Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer. It owns 30 daily newspapers. The company has a P/E ratio of 4.2, equal to the average media industry P/E ratio and below the S&P 500 P/E ratio of 17.7. McClatchy has a market cap of $160.9 million and is part of the services sector and media industry. Shares are up 15.5% year to date as of the close of trading on Thursday.

You can view the full McClatchy Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet Ratings Staff
null

If you liked this article you might like

Newspapers Demand Money From LexisNexis... It Might Just Be the Start

Newspapers to LexisNexis: Time to Pay Up

Apollo Global Management Buying Major Stake in CareerBuilder

Warren Buffett Issues Dire Prediction for Newspapers