Trading newspaper stocks can have as much to with the downs as the ups of the market. The old shapers of public opinion have had to change, go out of business, or be bought out by competitors. The survivors such as the Washington Post ? WPO ? have evolved into diversified companies with a range of products both nationally and internationally. Because the same news content can be recycled interminably a single news item will show up in the parent newspaper, one the company?s subsidiary radio and TV outlets, and on up to the minute internet blogs. The Post has taken this a step farther by getting into English language programming across the globe as setting up permanent faculty colleges as well as professional training programs. The reward, after several down years is that, according to analysts, the stock is set to reward investors with up to a thirty percent yearly return for the next several years. Traders will be well advised to do their own analysis before buying or selling the stock and to do their own technical analysis as well to make sure that the market has not already discounted this ?news.?
There are two instructive comparisons to the Post for those interested in trading newspaper stocks. One is the New York Times Company, and the other is News Corp. The New York Times – NYT – is a venerable newspaper and often considered the paper of record. It has not widened its range of ?products? as far as a company like the Washington Post and has fallen prey to defections to the electronic media, even though the paper has an online edition. This is evidenced by a fall in stock price from $45 in 2002 to $7 today. Whereas the Post is expected by many to rally the Times is a different case. Successful stock trading of the Times as well as with other languishing stocks has to do with company performance as market expectations. The Times is a valuable asset. It may well be underpriced. Like Motorola – MSI, which recently sold its cell phone division to Google -GOOG, the company may not be making the best use of its assets and could possibly end up as the core asset of some else?s news conglomerate. This would be a sad event but perhaps profitable for those trading newspaper stocks.
Speaking of news conglomerates and trading newspaper stocks brings us to News Corp – NWS. The owner of the Wall Street Journal through its Dow Jones subsidiary, as well as the Times of London and papers across the world is the world?s second largest media conglomerate. The company?s stock has risen from around $6 a share in early 2009 to around $15 today. The company benefits in its news business from the ability to take news items researched and written by one part of its empire and recycle the content internationally across both print and electronic media. In trading newspaper stocks traders are well advised to look at both the fundamentals and technical aspects of any given stock. The idea should never be trying to outguess the market but trading based upon a clear sense of both the fundamentals and market sentiment. Our intent is not to have traders buy or sell the stocks mentioned here but to develop an effective strategy for stock evaluation and trading.
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