Stocks in the News: NYT Continues to Struggle

Posted: Jul 23, 2013 12:01 AM

Stock Number one is:

New York Times Company, (SYMBOL: NYT) and the headline says:

ESPN Poaches Nate Silver From New York Times -- Forbes

The New York Times reported that Nate Silver is taking his popular statistic-based political blog, FiveThirtyEight, to ESPN, dealing another blow to the Times’ attempts to sustain both audience and profits in the digital world.  Standard and Poor’s says “[We] believe it remains the best positioned of the newspapers in our coverage universe”, but gives the stock a Sell rating based on valuation.

In the midst of a difficult transition from print to digital, earnings are projected to fall a total of 26% over the next three years.  The PE is 28.

On July 10, we said “The stock price is approaching long-term resistance at $14.  We see no reason for investors to own shares in a company with consistently shrinking earnings.”

Our Ransom Note trendline says:  SELL THE NEW YORK TIMES.

Stock number two is: 

McDonald's Corp., (SYMBOL: MCD) and the headline says:

Dog Days Come Early – Morgan Stanley

McDonald’s disappointed analysts with second quarter earnings two cents shy of estimates, coming in at $1.38 per share, on weak revenue.  Poor global economies are  projected to hurt sales all year, although competition from Burger King and Taco Bell could be compounding revenue problems.

The company remains solidly profitable, and expects earnings to grow 6-10% per year for the next three years.  The dividend yield is 3.15%, and the PE is 17.

In April and May, we told investors that “the stock will likely trade between $98 and $104 in the very near-term,” which is exactly what it's done.  Watch for continued sideways trading activity.

Our Ransom Note trendline says..... HOLD MCDONALD’S.

Stock number three is:

Halliburton Co., (SYMBOL:  HAL) and the headline says:

Halliburton Profit Drops as Fracking Prices Fall Amid Glut -- Bloomberg

Global oilfield services company Halliburton said second-quarter profit fell due to price pressure on hydraulic-fracturing services, and lower onshore rig count.  However, earnings came in higher than expected.  The company repurchased $1 billion of shares in the second quarter, with another $5 billion authorized.

Earnings per share are projected to grow 6, 27, and 18 percent over the next three years.  The PE is 14, within a normal range of 8-26, and the dividend yield is 1.10%.

Energy stocks are volatile, and Halliburton is no exception.  It’s currently working its way toward price resistance in the upper $50’s.  The stock appears ready to climb immediately.

Our Ransom Note trendline says....  BUY HALLIBURTON.