MDP

Meredith Corp

TMT


Presented:08/06/2019
Price:$54.18
Cap:$2.45B
Current Price:$59.07
Cap:$2.71B

Presented

Date08/06/2019
Price$54.18
Market Cap$2.45B
Ent Value$5.46B
P/E RatioN/A
Book Value$22.98
Div Yield4.25%
Shares O/S45.17M
Ave Daily Vol358,461
Short Int26.30%

Current

Price$59.07
Market Cap$2.71B
Meredith Corp. engages in television broadcasting and magazine advertising business. It operates through the Local Media and National Media business segments. The Local Media segment includes television stations and offers websites, mobile-optimized websites, and mobile applications. The National Media segment consists of national consumer media brands delivered via multiple media platforms including print magazines and digital and mobile media, brand licensing activities, database-related activities, and business-to-business marketing products and services. The company was founded by Edwin Thomas Meredith in 1902 and is headquartered in Des Moines, IA.

Publicly traded companies mentioned herein: Alphabet Inc (GOOG), Amazon Inc (AMZN), Apollo Global Management LLC (APO), Facebook Inc (FB), Meredith Corporation (MDP), Nexstar Media Group Inc (NXST), Sinclair Broadcast Group (SBGI).

Highlights

Our presenter is short shares of Meredith Corp (MDP) as he believes management has over promised on guidance following the acquisition of Time Inc in January 2018. The magazine business is experiencing secular declines - print advertising declines have worsened from MSD to LDD. While 30% of MDP’s ebitda comes from local TV stations, the majority ~70%, comes from their magazine business. In a recession, magazine and print are the first to get cut out, and with such a large magazine portfolio experiencing numerous headwinds and general cyclical pressures, as well as high leverage, he models an EBITDA estimate that is 10% below street. 

Management has offered guidance of high single digit growth on digital revenue, however digital revenue has been fairly flat and hasn't grown in a number of years as Facebook, Google and Amazon are taking over 100% of incremental growth in the digital advertising market.

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