We originally recommended the New York Times (NYSE: NYT) on August 24, 2009 (IWB #2931) at US$8.06. The stock closed Friday at US$13.33. (All figures in U.S. dollars.)
At the same conference referenced above, the New York Times said it expects fourth-quarter advertising revenue to drop 25% compared to the same period last year, after third-quarter ad revenue had declined by 27%, and by 30% in the second quarter.
Online ad revenue at New York Times is expected to rise by about 10%, the company said. As recently as the second quarter, total online revenue at the company dropped 14%.
This stock is up 65% since we recommended it. It can be argued that the New York Times offers a unique way to play the upscale, high income, highly-educated elite market in the U.S. but I am worried about valuation at this point. I'm going to recommend selling here and I'm looking at News Corp. (NDQ: NWSA) or Disney (NYSE: DIS) as possible alternatives. I'll have more to say on this in an upcoming issue.
Action now: Sell.