Posted on 04/06/2006 7:18:30 AM PDT by Grampa Dave
AP Dow Jones Shares Decline After Downgrade Wednesday April 5, 4:52 pm ET Dow Jones Shares Drop 3.2 Percent After Analyst Reduces Rating on Stock to 'Sell'
NEW YORK (AP) -- Shares of Dow Jones & Co., publisher of The Wall Street Journal, fell more than 3 percent Wednesday after an analyst reduced her rating on the stock to "sell," citing a high price for the shares and the likelihood that ad revenue growth could be slowing. Dow Jones shares fell $1.26, or 3.2 percent, to close at $37.85 on the the New York Stock Exchange. However, even with the selloff, the shares are still up about 7 percent so far this year, partly on investors' hopeful outlook for better results in the second half of the year and a boost from the Journal's new weekend edition.
Merrill Lynch analyst Lauren Rich Fine said in a note to investors that the shares looked expensive and that ad momentum could be slow in the second half of the year. She also said that while Dow Jones shares are occasionally bolstered by speculation that the company could be sold, she said this was unlikely in the near term. The Bancroft family group retains voting control of Dow Jones through a special class of stock.
Fine said the fact that Dow Jones hasn't raised its first-quarter earnings outlook, despite good ad linage growth, "suggests weaker ad rate realization, and higher costs." She downgraded Dow Jones shares to "Sell" from "Neutral."
The Wall Street Journal's ad linage grew 8 percent in January and 18.6 percent in February, boosted by the launch of the weekend edition. In March, Fine estimates that the Journal's ad linage was up at a high-single to low-double digit rate, with color advertising up 12 percent in the month.
New York-based Dow Jones, which also owns MarketWatch, Barron's and a group of community papers, has maintained that it expects first-quarter earnings per share in the low-teens cents. Wall Street is looking for a profit of 15 cents per share on revenue of $444.3 million, according to Thomson Financial.
In addition to revenue concerns, Fine said Dow Jones isn't likely to go up for sale anytime soon. The company's new management team -- CEO Richard Zannino and Journal publisher Gordon Crovitz -- will instead be given time to put their ideas to work, Fine said.
Dow Jones was the subject of takeover speculation last summer that pushed the stock higher. But the trustee of the Bancroft family has repeatedly said that the family isn't looking for a buyer.
Over the past 52 weeks, Dow Jones shares have traded between $31.94 and $43.10.
Hmmm! Maybe the liberalism at the WSJ is having the same impact on the DJ as with the other major fishwraps.
Maybe any increase DJ has this year was based on the hope that there might be some of this pot offered up for sale.
I think there were rumors GCI looking at them last year. The only thing saving Dow Jones is they have the WSJ online, the only newspaper in the country that has been able to charge for its content and make it pay...
It appears that DJ may join the other so called major Fishwraps in their Bloodbath of 2006 re stock prices.
I wonder if one of you gentlemen could post this chart for us. The lawyers @sbc/at&t/yahoo are apparently blocking any attempt by me to post this chart.
http://finance.yahoo.com/q/cq?d=v1&s=nyt%2c+wpo%2c+trb%2c+mni%2c+gci+dj
OTOH, Canadian precious metal stocks are going nuts to the upside!
Check out this link for some performance numbers for this sector over the last week, month, and YTD.
Here's a link to today's winners:
http://www.golddrivers.com/Juniors/juniorpagesintraday.htm
Happy investing!
Here are the YTD leaders:
http://www.golddrivers.com/Juniors/juniorpageytd.htm
"I think there were rumors GCI looking at them last year. The only thing saving Dow Jones is they have the WSJ online, the only newspaper in the country that has been able to charge for its content and make it pay..."
Before I went on vacation last week, Miss Marple and LS had made comments about these side ventures bringing in enough income for these fishwraps, they could afford to run their negative BS and lose stock value.
LS has asked me to do research on this, and I was reminded by my wife of other research promised to our family members.
Hopefully someone can investigate how these arrogant bastards make enough money on their side ventures to stay afloat. LS can explain his interest in freep mail. This might be an opportunity to get some claim to fame in the future.
UPDATE 1-Dow Jones stock hit as analyst cuts rating to 'sell'
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(Adds details, updates stock price)
NEW YORK, April 5 (Reuters) - Dow Jones & Co. Inc. (DJ.N: Quote, Profile, Research) shares fell more than 3 percent on Wednesday after Merrill Lynch cuts its rating on the stock to "sell," saying the media company is overvalued, unlikely to be sold and could feel the pinch of slowing advertising revenue.
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Dow Jones, publisher of the Wall Street Journal, has long been the subject of takeover rumors, but Merrill Lynch analyst Lauren Rich Fine said a recent management shake-up should "quell speculation for some time."
"While DJ's shares are buoyed from time to time on speculation that the company will be sold, we do not believe a sale is likely in the near term," she wrote in cutting her rating on the stock from "neutral" to "sell."
Shares of Dow Jones fell $1.28 to $37.84 in midday trading on the New York Stock Exchange.
Fine also cited the media company's high valuation, about 27 times price-to-earnings, writing that "on any valuation metric, DJ shares are substantially above where the comps are trading."
Other publishing companies in Standard & Poor's publishing index <.GSPPUBL>, which includes Gannett Co. Inc (GCI.N: Quote, Profile, Research), Tribune Co. (TRB.N: Quote, Profile, Research) and New York Times Co. (NYT.N: Quote, Profile, Research), mostly trade from 10 to 20 times price-to-earnings.
Fine said the valuation could previously be supported by strong advertising momentum, but cautioned that momentum may not be as robust as has been expected.
Beyond just Dow Jones, Fine lowered ad revenue forecasts for the industry for both 2006 and 2007. As a result, she also cut her 2007 earnings per share estimates by just more than 2 percent on average.
At the same time, she said other shares of rival newspaper companies may have "bottomed at their current valuations." She specifically pointed to Tribune and Gannett.
The S&P Publishing index was down 0.29 percent at 281.80.
My opinion, unlike Ms. Fine's, is that those stocks have not yet bottomed out.
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Media/Entertainment
Newspaper Stocks Still Soggy
By Sandy Brown
TheStreet.com Staff Reporter
4/5/2006 12:49 PM EDT
URL: http://www.thestreet.com/stocks/media/10277605.html
The good news is that things can't get much worse for newspaper stocks.
The advertising and earnings pictures keep getting worse, but large-cap newspaper stocks may have bottomed anyway, according to a Merrill Lynch report Wednesday.
Gannett (GCI:NYSE) , Tribune (TRB:NYSE) and the New York Times (NYT:NYSE) are all down between 25% and 30% over the last year, while shares in Scripps (SSP:NYSE) are down 10%.
But "after a comprehensive review of both newspaper stock valuations and our fundamental outlook for the newspaper industry, we believe some of the larger-cap newspaper stocks have bottomed at their current valuations," Merrill says in a report Wednesday. The firm does business with the companies it covers.
The comment comes even as Merrill on Wednesday lowered its industry ad revenue-growth forecast to 1.5%-2% this year and 1.4% next year, from the previously targeted 2% to 3% rise in 2006 and 2007. Accordingly, Merrill has lowered its earnings per share estimates by 2% on average.
Research analyst Lauren Rich Fine says that "Tribune's valuation looks appealing, but as we see no attempt by the company to surface value, we see little catalyst near term." Rich Fine says Gannett suffers from the same symptoms, but notes that the USA Today owner, which holds some regional assets in the U.K., could benefit from signs of a turnaround over there. Where Scripps is concerned, Merrill says it has attracted some value interest, but adds that it remains early to get too aggressive.
A confluence of factors led by the emergence of the Internet as a primary source for news and classified information has cast a pall over the industry. Players have scrambled to build online by buying or partnering up with firms like About.com, Career Builder and Shopzilla.
Some of the companies mentioned are helped by a certain diversification of media assets, most notably Scripps, which has been buoyed by the strength of its cable networks like HGTV and Food and new-media investments. Tribune has come under pressure from some quarters to divest of noncore assets like baseball's Chicago Cubs, but has yet to act on any significant divestiture.
Merrill also downgraded Dow Jones (DJ:NYSE) from neutral to sell, citing valuation and the unlikeliness of a sale.
That article quote the ubiquitous Ms. Fine as one of their reasons. Who is she? I think I will try to find out this afternoon.
From the article..........Research analyst Lauren Rich Fine......maybe with Merrill Lynch....
It occurs to me that she is in a very powerful position in regards to media companies. Hmmm.
Also, Miss Marple noted, "That article quote the ubiquitous Ms. Fine as one of their reasons. Who is she? I think I will try to find out this afternoon."
How about this as a conflict of interest: But "after a comprehensive review of both newspaper stock valuations and our fundamental outlook for the newspaper industry, we believe some of the larger-cap newspaper stocks have bottomed at their current valuations," Merrill says in a report Wednesday. The firm does business with the companies it covers."
I am not very high on Merrill....
Well, look at this. Our own ABB posted a thread about the Bancroft family and the DJ. This is a real interesting article. The DJ has been having problems for over 5 years when this article was published.
Sounds like a lot of people like Miss Marple and I got tired of their Al Hunt liberalism and cancelled our subscriptions and maybe some good advertisers.
http://www.freerepublic.com/focus/f-news/1467605/posts
At Dow Jones, It's All About Family
New York Times ^ | August 20, 2005 | Joseph Nocera
Posted on 08/21/2005 3:48:11 AM PDT by abb
THE press did a good job for the stock price yesterday," said Roy A. Hammer earlier this week. He was kidding, of course. "It's not the way you want to have the stock go up," he quickly added.
Mr. Hammer, 71, a partner in the Boston law firm of Hemenway & Barnes, is a trustee for the various trusts held by the Bancroft family, who control Dow Jones and its trophy property, The Wall Street Journal. He was referring to an article in The New York Post on Monday that suggested some of the younger Bancrofts were so unhappy with the continued underperformance of the company that they had begun agitating for Dow Jones to be sold. As a result, Dow Jones stock jumped more than 10 percent.
Mr. Hammer reiterated to me what he told other reporters over the previous few days: The Post was wrong. And from my own investigations, I had to agree. Young Bancrofts, old Bancrofts, middle-aged Bancrofts: none of them want to sell Dow Jones, even though they could find a buyer in a nanosecond, starting with The Post's owner, Rupert Murdoch, who has made no secret of his desire to own The Journal.
Which is not to say that there isn't a high dose of family discontent, or that there isn't a good story in the current interplay between Dow Jones and the Bancrofts. There is. It's just not the one that appeared in The Post.
Merrill is about as reliable the NY Slimes in my eyes.
The Bancroft family are decendants of Clarence Walker Barron. Barron bought the company from Charles Dow, one the three founders of the company. Edward Jones had earlier sold his interest to Dow. The third founder was Charles M. Bergstresser
Of note, C. W. was 5'-5" tall and weighed in at 300#.
I cite as reference, "Wordly Power - The Making of the WAll Street Journal" by Edward E. Scharff
Thanks for posting that wonderful chart!
It makes my old heart feel so good!
Apparently one of the big con games the rich family owners play with the minor stock holder like the DJ family is to get word out that they want to sell their stock in DJ or they are interested in a merger.
DJ stock is about the only newspaper stock that had an increase on its stock price in the last 4-6 months besides Knight Ridder which was forced to sell.
It will be interesting to see how the DJ price holds up now there appears to be no buyers.
One year, The Ny Slimes family can start a rumor of buyout and the next year the DJ family can. Both companies have been rumored to be considering buy each other in the past few years.
We need tax cuts, and cut inflation. "I'm not only going to make up for today's inflation, but I'm going to anticipate tomorrow's inflation."
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