NEW YORK (TheStreet) -- McClatchy Co. (MNI) hit a one-year high of $7.32 as of 11 a.m. on Monday after The Wall Street Journal reported the Classified Ventures consortium, which includes McClatchy, has put the cars.com online marketplace for sale for up to $3 billion.
The Wall Street Journal cited people familiar with the plans and reported that the consortium wants to capitalize on growing values for e-commerce sites. Potential bidders for the stock could include private-equity firms and strategic investors. One of the publishers in the consortium could also raise its stake or buy out other members.
Gannett Co. (GCI), for example, owns 27% of Classified Ventures but could raise or sell its stake based on the price, according to the report.
TheStreet Ratings team rates MCCLATCHY CO as a "sell" with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate MCCLATCHY CO (MNI) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The area that we feel has been the company's primary weakness has been its declining revenues."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MNI, with its decline in revenue, underperformed when compared the industry average of 4.2%. Since the same quarter one year prior, revenues slightly dropped by 8.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for MCCLATCHY CO is rather high; currently it is at 60.64%. 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 3.63% trails the industry average.
- MCCLATCHY CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, MCCLATCHY CO increased its bottom line by earning $0.21 versus $0.00 in the prior year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 141.7% when compared to the same quarter one year prior, rising from -$30.02 million to $12.53 million.
- This stock has increased by 104.69% over the past year, outperforming the rise in the S&P 500 Index during the same period. Despite the fact that the stock's value has already enjoyed nice gains in the past year, we feel that the risks surrounding an investment in this stock outweigh any potential future returns.
- You can view the full analysis from the report here: MNI Ratings Report