Friday, February 27, 2009

Zack's: "Our top sell recommendation is McClatchy" (updated with a Gary Pruitt joke)

Nobody can be surprised by this:
Our top Sell recommendation in the Publishing sector is McClatchy Company (MNI). As expected, McClatchy eliminated its dividend in January, shortly after a 50% cut in September proved insufficient.

We expect more pain ahead for McClatchy. One-third of MNI’s revenues are in the hard-hit California and Florida markets. Circulation revenue is falling for the 3rd consecutive year, while ad revenue sinks disproportionately (down 21% in 4Q08). In our view, MNI can’t shrink its costs fast enough, posing a risk of tripping bank covenants if the revenue decline should accelerate and thereby raise leverage. Given the continued downward trend in earnings and cash flow, coupled with the company’s high debt-load (Debt/TTM EBITDA was 5.1x).

You're probably wondering what kind of genius still owns McClatchy stock. I can't tell you why anybody would own this stock -- and no offense to Les. If you want to look at the roster of brilliant major MNI stockholders, click here.

UPDATE: From comments, a Gary Pruitt joke:
So this bum walks up to Gary Pruitt and says: "Hey buddy, can you spare a quarter?"

Gary: "Um, sure I guess so, gonna get a cup of coffee?"

Bum: "Naw, I'm gonna buy some McClatchy stock!"



Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

No Hope. No Change.

All Doom for McClatchy.

Anonymous said...

Funny, lately we have had our share of blog trolls.

It's nice to have outside, objective, and factual people rate

Anonymous said...

"Earth to rhonda and tiller boy?"

Anonymous said...

And if you are interested here is a run down of the people that gave you this wonderful forecast to your future. (including their pay)

Anonymous said...

No apology, needed. The only reason I'm holding is to see firsthand what happens to stock when a public company goes bankrupt. I assume there will some sort of capital gains loss for tax purposes.

And, to clarify, I'm only holding, not buying.

Les Weatherford

Anonymous said...

Sorry Kevin, I couldn't wait!!!
So this bum walks up to Gary Pruitt and says:"Hey buddy, can you spare a quarter?"
Gary:"Um, sure I guess so, gonna get a cup of coffee?"
Bum:"Naw, I'm gonna buy some McClatchy stock!"

Anonymous said...

It’s obvious the company will declare chapter 11 bankruptcy. The question is how soon will this happen, and will they be able to avoid chapter 7.

Anonymous said...

Bada-boom, bada-bing
MNI stock = 49¢
The Great 50¢ Firewall Falls!

Anonymous said...

I was checking some comments at the Sacbee, and the majority of the remarks still call the Bee a liberal rag. That has been the same complaint for a few years now. I would have thought someone would have taken notice of that many complaints. Well, on the other hand, in their arrogance, I guess they would not pay attention. So much for not taking care of business. I guess working in an echo chamber makes you deaf.

Anonymous said...

Anon 156 is right.

His link reads like a whose who, starting with Al Copone. All the suspects are laid out! Nice find.

Anonymous said...

Re Anonmyous February 27, 2009 4:38 PM post:
Yes, working in an echo chamber makes an editorial staff deaf. Here's how they view it on the inside: It is their job to enlighten and educate anyone who is not as PC as they are. Conservatives, libertarians and, indeed, anyone who does meet their test of politically correct, should be decried, in the minds of most Bee staffers. No, the staff at The PCB was not interested in understanding to whom Sarah Palin had appeal or why, for instance. (I am not a Palin fan. Her pick as VP completely floored me, and I am not, and will not be, a member of a political party.) It was more than disconcerting to be an editorial staff member at McClatchy and listen to my coworkers talk about working class or rural whites, the last group of people they felt should be shown any respect.
Be warned: Bee staffers are aces at parsing reasons for the failure of their newspaper. They will blame the economy, maybe even Pruitt, and especially, the great unwashed, ignorant, unenlightened former Bee readers who do not gratefully soak up the ideology the Bee dishes out in every edition.
There might be a few individual reporters who do their level best to report news even-handedly, but the atmosphere they work in (I should say "worked in") rewards making demeaning jokes about most of the residents of the Sacramento region. Most of them are so out of touch with where they live. Remember Janis Heaphy's remarks a few years ago at a Sac State graduation? Inside The Bee, Janis was applauded for trying enlighten all those rednecks.
It's not your imagination. It's not just conservatives getting their noses out of joint. Check out the voter registrations of Bee staffers. They had absolutely no qualms about their bias, even as their circulation dropped. Of course, their economic problems are due to closing car dealerships. That's their story and their sticking to it like a rat terrier carrying a dead rodent.

Anonymous said...

We can all spend time talking about Gary Pruitt and MNI. But really - the whole newspaper industry is in the toilet.

Why not discuss what we think is needed to keep newspapers alive across this country.

I realize that MNI as most newspapers said years ago when asked about the internet and the newpaper industry - "we (the newspaper of the community it serves is the local information provider that cannot be replaced.

Sounds like they were wrong.

What do they do now.