Hitting a Gusher by Kopin Tan
Highlighted companies: Consumer Discretionary SPDR ETF (NYSEARCA:XLY), Clear Channel Communications Inc. (NYSE:CCU), Reader's Digest Association Inc. (NASDAQ:RDA), Google Inc. (NASDAQ:GOOG)
Summary: Retail stocks have blossomed on the tails of a 25% slide in crude oil prices; Consumer Discretionary Select SPDR ETF (XLY) is up 22% over the period to all-time highs. But last week's retail sales data, showing 4.1% growth (vs. recent averages of 6%) has some investors questioning its continued potential. Admitting self-promotion, Barron's likes media stocks, and "traditional media" in particular, as the "least consumer-credit-sensitive" retail sub-sector. Last week's buyouts of Clear Channel Communications Inc. (CCU) ($19b) and Reader's Digest Association Inc. (RDA) ($1.6b) seem to say traditional media still has its place, and that traditional companies will adapt to the new paradigm -- overcoming their current "identity crisis." As Natexis Bleichroeder analyst John Roque observed, "A gauge of several newspaper stocks last week began nudging above its 40-week average after declining steadily over 30 months -- a hint the group may have bottomed and could begin to turn around."
Quick comment: Online Ads Steal the Show From Traditional Media • NY Times' Predictions Aside, Click Fraud Won't Slow Online Ad Spending • Reader's Digest Agrees To $1.6 Billion Buyout • Newspapers : Another Slide Coming? • Barron's Buries the Lede on Newspaper Stocks