Media General is a leading TV and Newspaper operator and we think MEG's EPS will be up in 2008 as MEG has sold unprofitable assets and paid down its debt. We think MEG's turn-around story has gone largely unnoticed by Wall Street and we think MEG's EPS will double -despite a miserable economic backdrop. Our 2008 EPS estimate is $1.17 versus $0.53 in 2007 .
* MEG's guidance is for an operating loss per share of $0.11 including employee severance charges.
*MEG's 2008 EPS guidance ranges from $1.20 to $1.31 including severance charges verus the $0.98 first call estimate.
*Our EPS estimate for continuing operations is $1.17 for 2008 and $1.43 for 2009 as we expect MEG will benefit from its cost reduction program and an improved economy in 2009.
* While we think MEG's revenue from its Florida media operations are still in decline, we think the company has benefited from lower interest expenses and reduced headcount.
*We think MEG will reiterate its EPS guidance for 2008 during the earnings call as advertising revenue ($43+ million) from the Summer Olympics and the US Presidential election should offset the loss of Home and Auto advertising owing to a weak economy.
* We think MEG is exceptionally cheap at $11 per share and we are attracted to MEG's dividend yielding 8.6% at the current price.
*While investors are still be concerned about revenue declines we think any stock price weakness due to weak Newspaper ad sales in Florida is a buying opprtunity.
*Our sum of the parts analysis indicates that MEG is worth $17 to $27 in a takeover and we think both GNI and NYT are potential strategic buyers of MEG as both companies operate newspapers in Florida.
*To derive our $17 target we apply a 12x multiple to our $1.43 recovery EPS estimate for 2009.
11.20
Price Open 11.37
Previous Close
11.20
Day High
10.56
Day Low
1.14
Beta
34.59/7/16/07
52wk High/Date
10.23/7/14/08
52wk Low/Date
241.3 Million
Market Capitalization
22.3 Million
Shares Outstanding
73.00
Volatility Avg(20 day)
196.2 Thousand
Avg Vol (10 day)
30.1x
P/E Ratio
0.36
EPS (TTM)
0.23 (9/15/08)
Declared QRTR Div
8.50%
Yield
8/27/2008
About Me
- Rich Tullo
- Richard Tullo is a securities analyst and trader with more than 20 years of experience. During the late 1990s he brought more than 40 technology companies public as a NASDAQ market maker for Hambrecht & Quist and Cowen and Co. From 2001-2004, Rich Tullo was an investment analyst for Providence Capital an activist hedge fund in New York. More recently, Rich was an analyst with Sidoti and Company a noted independent research firm and published investment reports on the Media and Telecom industry. Rich Tullo has also published numerous editorials, reports and industry white papers on infrastructure investing and exotic investment instruments