Shares of The New York Times Company NYT have skyrocketed more than 16% in the past three months. If you haven’t yet taken advantage of the share price appreciation, then the time is right to add the stock to your portfolio. After all, The New York Times looks promising and is poised to carry the momentum into 2016. The Zacks Rank #2 (Buy) company’s recent performance speaks of its popularity among investors. Let’s delve a little deeper into the reasons.
Strong Earnings Trend & Upward Revisions: The New York Times continued its earnings beat trend with better-than-expected results for the third quarter of 2015 driven by increase in digital subscribers and rise in circulation revenues. With this, the company has surpassed earnings expectations for five straight quarters. The average positive surprise over the trailing four quarters comes to 29.7%. Following the impressive third-quarter 2015 performance, the Zacks Consensus Estimate for fiscal 2015 and fiscal 2016 earnings has moved up by 13% and 10.9%, respectively over the past 90 days to 61 cents per share. The fourth-quarter earnings estimate stands at 29 cents, up 20.8% in the past 90 days.
Diverse Revenue Streams: The New York Times Company has been adding diverse revenue streams, which include a circulation pricing model and a pay-and-read model for NYTimes.com and the International New York Times, to make it less susceptible to the economic conditions. The company is also adapting to the changing face of the multiplatform media universe, which currently includes mobile, social media networks and reader application products in its portfolio. The company wishes to launch lower-priced as well as premium subscription based model to target different masses according to their appetite, and emphasize on online video production and brand extension.
To Read Please Subscribe: The company fixed a monthly charge of $15 for accessing articles over the restricted number on its website and a smartphone application; $20 for unlimited access online and on Apple Inc.'s iPad tablet computer application; and $35 for online, smartphone and iPad application. Moreover, the company introduced a plan of 99 cents under which one will be able to enjoy all digital offerings for one month. Online visitors are not able to access more than 10 free articles per month. Mobile app users will now be able to access a maximum of three articles per day from over 25 sections, blogs and slideshows, before being asked to subscribe. Earlier, the users only had access to the “Top News” segment, unlike subscribers who could enjoy content beyond the prescribed limit. However, the video content remains free for all.
All these factors make The New York Times appear promising, making it a solid choice for investors.
Other Stocks that Warrant a Look
Other stocks that warrant a look in the retail sector include AMC Networks Inc. AMCX, Entravision Communications Corporation EVC and Salem Media Group, Inc. SALM. AMC Networks and Salem Media Group sport a Zacks Rank #1 (Strong Buy) whereas Entravision Communications holds a Zacks Rank #2 (Buy).
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