October 7th, 2009

Another Laggard Industry Group Coming to Life: Media

“Dash for the Trash”, that’s what CNBC called the market run-up this past summer. If you recall, I called it “shooting fish in a barrel”. Besides stocks in the huge Oil & Gas complex, another Industry Group that seems to have lagged behind this past summer and seems to be now trying to catch up are stocks in the Media-Periodicals and Broadcasting Groups.

We all know the story of why traditional print and broadcast media is “dead” and some have wished them their R.I.P. Fundamental Analysts list such handicaps as 1) lower subscription revenue due to competition from online entertainment, 2) high costs, like paper, 3) low ad rates due to slow economy and decline in subscribers, 4) consumer preference for to entertainment on demand and choice.

But some of the stocks in these two groups seem to be stirring. They appear to have formed reversal base patterns (true, they weren’t very far away from $0.00) and, because there aren’t very many stocks left that haven’t had huge percentage gains from the depths, these may come back to life.

Here are a few with interesting charts (click on symbol for chart):

  • MNI (McClatchy)
  • LEE (Lee)
  • AHC (A.H. Belo)
  • NYT (NY Times)
  • BCI (Gannett)
  • TVL (Lin TV)
  • SBGI (Sinclair)
  • CETV (Central European)
  • CBS
  • TV (Grupo)

As you know, I think we’re getting close, both in time and level, to an interim market consolidation so might be a little late to make major commitments to this group. But because they’re mostly high volatility and many have low prices there might be a little juice left to squeeze out of them.

The list is assembled strictly based on a review of the charts; no researched was performed on their financial health. If you’re interested, perhaps you should assemble your own “etf”, or pool, of a number of the stocks to reduce the risk of any one of them failing while you own them.

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