It’s been about 10 months since I put out my bullish call on Meredith Corporation (MDP), and in that time the shares are up about 120% against a gain of ~54% for the S&P 500. I thought I’d check in on the name again to see if it makes sense to continue to hold. As you may have already guessed, I’m going to make this determination based on the recent financial history here, and by looking at the stock as a thing distinct from the underlying business. I’ll also comment on the short put trade that I earlier recommended. Finally, I’ll remind readers that I suggested that the dividend was in danger fully 18 days before the company suspended it. If you think I am not going to take advantage of the opportunities to brag that this presents, wrong are you, my friend! I never said I was mature. In fact, I’ve made the opposite claim on this forum for years now.
I’ll get right to the point, because I’ll admit that this article is a long one. In spite of the run up in price, I think Meredith remains an attractive investment. Normally I worry about dramatic price rises, because holding all else constant, shares trading at X are much less risky than shares trading at 2 times X. Things aren’t held constant in this case, though. Meredith has had an absolutely spectacular performance in 2020. Further, I think there’s some reason to believe that the dividend will be reinstated in the coming months, and I think this will buoy prices further. For those who are nervous about the stock itself, I recommend a short put that I consider to be a very compelling investment at the moment.
The Dividend
I guarantee you that I’ll get to the financial
