Over the past year or so, I started to compile a list of mostly qualitative warning signs that cemented my already-sour view of several companies. The latest addition to my list comes from Saga Communications ( SGA) Chairman, President and CEO Ed Christian. Relatively obscure, Saga owns and operates radio and television stations in primarily small- to medium-sized markets. As evidenced by its most recent quarterly report, Saga likes to boast about feats such as increasing free cash flow and 4.3% year-over-year revenue growth. On the surface, Saga looks like a relatively sound and stable play for one of the tamer sections of your portfolio. But then Christian speaks. Consider the following blurb from Radio-Info.com:
It was Cumulus CEO Lew Dickey who said Monday that chief marketing officers "are looking at social media, experimenting, but it's coming out of all" ad budgets, including TV. He sees "a lot of experimentation" with digital but says "It's way premature to say there is a secular shift in any direction." Here's what Saga's Ed Christian said in response to a similar question yesterday, about whether some local ad dollars are going to mobile. He "hasn't seen any business say, we're going to use texting instead of radio" (emphasis added).Of course, he hasn't seen any business say that. My 90-year old grandfather, who just found out what Skype is over the weekend, would use more sophisticated language to refer to mobile advertising. And you wonder why Pandora ( P) and others are disrupting an entire industry? Heck, as far as I can see, you cannot even get a webcast of a Saga conference call. You have two options -- dial in (do you think Christian uses a rotary phone for this?) or wait for an intern to produce a transcript of the call (via typewriter?) shortly thereafter. In a recent article, I pointed out how Mel Karmazin's myopic and old-guard view of the audio entertainment space sends up red flags on every conference call Sirius XM ( SIRI) webcasts. Former Research in Motion ( RIMM) CEO Jim Balsillie takes the cake, however, in the quest for displays of conference call absurdity that should have sent investors running breathless for miles. From his company's Q4 2011 call (in March 2011), get a load of Balsillie's pathetic imprecision as he tried to quantify demand for his company's PlayBook tablet:
It's not in the hundreds of thousands. No, I mean, clearly, it's a major, major launch that we expect to be a growth driver for a long, long period of time. And I just don't want to get into sort of semi-guiding, but the interest is extremely high. This is a shift in computing globally. The demand -- let me put it this way. I've got many corporate clients that have approached us about each wanting tens of thousands, several tens of thousands of PlayBooks. And that is what they're looking at, that is what they're assessing, and they're looking at tablets, and they like the PlayBook architecture.Contrast this with an Apple ( AAPL) conference call where CFO Peter Oppenheimer gets as specific as competitive concerns allow. Each quarter the ultra-secretive Apple names names of the companies piloting and deploying iPhones and iPads. And is there any doubt that Oppenheimer could produce hard numbers, with confidence, if he had to spill the beans on demand? If you were long RIMM, hopefully you sold long ago. It might be wise to consider starting the process of unloading shares of SGA and SIRI as well. Often, words clue investors in on what's to come better than backward-looking numbers compiled and presented, more often than not, by bean counters and steadfast MBAs, not pioneers and visionaries.