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Anna Johansson
Anna Johansson
Articles (38) 

Are Print Media Stocks Still a Good Investment?

Is digitization dragging down stocks?

August 12, 2018 | About:

Print media has been in decline, with major magazines closing and local newspapers all but extinct. Does that mean print-based corporations are a bad investment? The answer isn’t quite so simple.

To thrive in today’s marketplace, print brands are pivoting to digital and evolving their strategies so that they aren’t necessarily reliant on traditional distribution models. With that in mind, investors should focus on diversified companies with roots in print, as well as newer media groups.

The New Kids

New Media Investment Group (NEWM) is the major force behind local and online news today, and though their stock came in slightly below growth targets, the company reported Q2 2018 earnings of $388.80 million, beating industry predictions. Despite their low name recognition among average buyers, then, NEWM has clearly cornered a niche market – we still need local news, even if no one wants to fund or buy neighborhood papers anymore. From the Akron Beacon to the Palm Beach Post, NEWM may be running your local paper and they’ll likely continue to grow.

NEWM is an affordable investment, generally trading somewhere between $15 and $20 a share and has shown incredible 3-year growth, better than almost 90% of the global publishing industry. The company is also making intelligent, diverse acquisitions, taking on Online Automotive Solutions earlier this year while reducing low profit Alaska holdings.

Print Basics

While new publishing brands like NEWM are a powerful force, basic print venues are also thriving. For example, Staples (NASDAQ:SPLS) recently announced a line of exclusive Martha Steward office products likely to be popular with crafty suburbanites – and their stock has been up. And corporate printing needs are hardly about to disappear. Magazines will always need a press and companies thrive on their outreach programs, printing products like greeting cards for clients and sales mailings, bolstering print’s timeless appeal.

Grey Lady Growth

The New York Times (NYSE:NYT), a national paper of record, has had some tough press recently, but their stock is up significantly since January 2018. More importantly, though, investors can be sure the paper isn’t going anywhere. That makes it a good investment, right?

Investment experts the Kahn Brothers reduced their stake in NYT earlier this year, shifting their investments towards banking and pharmaceuticals – but NYT remains in a top portfolio position, suggesting it’s still considered a powerhouse among the best investors. And with growing digital subscribers, up more than 25% year over year, NYT has demonstrated their ability to pivot within a changing economy and culture.

Movers And Shakes At Meredith

If you’re not familiar with the name, Meredith Corp. (NYSE:MDP) it’s the company behind Time Magazine, People, Shape, Sports Illustrated, and many more top lifestyle publications. From that list alone, it certainly seems MDP is thriving, but the reality is more complex that that. Though MDP is hardly a bad investment – they’re masters of digitization and new advertising strategies – they’re still trying to strike a balance.

For Zacks, now is a good time to get out of MDP; the stock is down over 27% from their one year high and somewhat volatile. NYT is definitely more reliable from the perspective of print growth, but MDP is reorganizing. Shape is investing more deeply in fashion content, Real Simple is adding shopping capabilities online, and the company may sell off some of their less popular titles. Keep an eye on it as we head towards 2019, but don’t buy yet.

Despite declining physical circulation and the loss of local print papers, print itself isn’t going anywhere – it’s just moving to screens. Don’t discount the ongoing appeal of major papers and magazines, which continue to draw more subscribers, whether online or in print. What we think of as traditional media is changing, but the brands behind those publications are still relevant and profitable.

Disclosure: I do not own any of the stocks mentioned in this article.

About the author:

Anna Johansson
Anna is a freelance writer, researcher, and business consultant. A columnist for Entrepreneur.com, HuffingtonPost.com and more, Anna specializes in entrepreneurship, technology, and social media trends. Follow her on Twitter and LinkedIn.

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