Cart (0)
business newsWestwood One Has a Face For Radio
By
Justin Sharon
Nov 30, 2010 4:45 pm
Shares are up more than 8% and President Rod Sherwood says a "stabilizing advertising market" is a key driver going forward.
PRINT
 |
|
The 36-year-old Manhattan-based outfit pipes in news, weather, sports, traffic, talk, and special events programming to roughly 5,000 stations nationwide. Third-quarter earnings on November 15 were impressive in a still sluggish economy, with radio revenue rising 9.3%, local/national spot commercials gaining 5%, and network ads up 4.6%. Company President Rod Sherwood cited a “stabilizing advertising market” as being a key driver behind the outperformance. Management also has high hopes for an exclusive partnership its Metro Traffic arm announced recently with Spanish-language content provider Univision Radio, as it seeks to capture more market share from America’s fast-growing Hispanic demographic.Radio may seem old-hat to many but its popularity among the most wired generation in history will surprise you. From Rush Limbaugh’s “Ditto-head” army to the ubiquitous 1010 WINS so familiar to anyone who has ever set foot in a big yellow taxi, listeners tend to be extremely loyal. Westwood One has never had trouble attracting talent to its airwaves. Top 40 king Casey Kasem, owner of arguably America’s most melodious voice, was once on its roster, as were Opie and Anthony, and Dennis Miller still is.
Bears can point to the endless range of entertainment options available in this flat-paneled age of ours, and negative free cash flow at the company. Still, radio’s salad days have lasted far longer than anyone could have predicted.To read related radio content, please see Alec Baldwin to NPR Pledge Drive Listeners: “Don’t Give!” and Clear Channel Facing Unclear Future.
Anyone listening to radio during World War II couldn’t have escaped the dulcet tones of Dame Vera Lynn, still going strong today in her 94th year, as she assured a weary world “We’ll Meet Again” once freedom’s fight was won. This morning it was her namesake, Vera Bradley (VRA), who equity analysts couldn’t wait to meet and greet. By my count no fewer than five Wall Street researchers initiated coverage on the Indiana apparel company, which sells its signature paisley patterned handbags and accessories at stores and outlets.
Although brokers Robert W. Baird rate it no better than Neutral with a $34 price objective after recent share price strength, other investment houses are more bullish. (That Baird was co-lead manager on its October IPO should dispel the myth that all analysts are inherently biased toward their banking clients.) The stock stands over 6% higher after KeyBanc Capital ($36 target) and Lazard ($39) both launched at a Buy and Piper Jaffray picked it up at Overweight. KeyBanc believes the company can continue to expand its offerings in adjacent categories and, eventually, grow its indirect channel via new products and new national retailers.
Clearly investors are prepared to put their money where their mouth is with the 28-year-old Bradley, although skeptics -- and not just germaphobes -- may need convincing. Coach (COH) represents fierce competition with a stock that stands at a fresh 52-week peak as we speak. And NetSpend Holdings (NTSP), which was up sharply yesterday on new sell-side coverage only to give back gains today, shows such gains are often fleeting.
Handbags at Dawn: LVMH vs. Hermès and Coach, Tiffany Show It’s the Luxuries That Count have more.
ING Groep ADS (ING) is sliding more than 4% even as the overall market has firmed somewhat during the day. The 19-year-old Amsterdam-based financial services behemoth, which provides banking, insurance, and wealth management worldwide through roughly 2,000 retail branches, is bearing the inevitable brunt of ongoing fears arising from the European debt dominoes in its home market.Though it reported an above-forecast underling net third-quarter profit of 1 billion euros two weeks ago, cost containment is still a sore spot for the firm. Its ING Direct high interest savings accounts attract a cult following -- and its surely the only one of its peers to be featured in restaurant reviews -- and ING Groep is attempting to broaden its North American profile in a part of the world where many consumers still think its first name is a suffix and second a spelling mistake. It just announced an intention to revamp its US insurance operations, ultimately leading to an IPO expected in early 2012. However, given the current sovereign debt situation, this company above all others should know any turnaround will be a marathon not a sprint.
Click here for one Dutchman’s bullish case for the European Union and the euro. Also check out Somehow, 7 of 91 European Banks Fail Fake ‘Stress Tests’, Goldman Sachs: Your Online Bank?, and Newsweek’s 25 Greenest Companies in the World.
Cintas Corp (CTAS) shares ended down more than 1% today. The Ohio outfit was founded in Vietnam War-torn 1968 America, when much of the country didn’t exactly love a man in uniform, but it provides work outfits and ancillary services to a range of industries. The firm posted a 3.6% gain in revenue for the first quarter of fiscal 2011, which is solid but hardly spectacular. Cintas remains an excellent proxy for, and mainly at the mercy of, an overall weak job market, the health of which we’ll get an update on this Friday with the November employment report. Excluding one-time charges, its most recent operating margins fell 240 basis points to 10.9% on a year-over-year basis at the company, which many remember for an unfortunate airport uniform theft in the immediate aftermath of September 11th. It has twice raised its dividend in 2010, and its rental operations generate 8% compound annual growth over the past decade, so investors may eventually be rewarded for their patience.
Turn to “American” Jobs: The Changing Face of Outsourcing and our series on Worst Work Uniforms.
Steve Smith's OptionSmith portfolio is +40% in 2010. Take a FREE 14 day trial to get exclusive access to the portfolio and trade alerts emailed to you before every trade. Learn more.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
