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News and Views

The Official Blog of WhaleWisdom.com

The New York Times Inc. (NYT) isn’t a stock that many investors think to get involved in, because let’s face it, in a digital world, who reads the newspapers? Don’t tell that to the hedge fund investors, because they were actively buying the stock and upping their holdings massively during the first quarter. The buying among funds was so impressive, the stock was added to the WhaleWisdom Whale Index 100.

The New York Times stock is up by about 40 percent in 2018, yes, 40 percent. Its stock performance is easily crushing the S&P 500’s return of just 1.7 percent. Not only that but it is easily outperforming some of the high-flying technology stocks like Facebook Inc. (FB), Alphabet Inc. (GOOGL), Microsoft Corp. (MSFT), and even Nvidia Corp. (NVDA).

Strong Subscriber Growth

It turns out the New York Times is a subscriber growth story of all things. The digital-only paid subscriber base for the Times grew by 25 percent in the first-quarter of 2018, to roughly 2.8 million versus last year. The company is looking for more solid growth in the second-quarter as well, with total paid subscriber growth rising by the mid-single digits versus 2017. The strong growth is expected to lift revenue in 2018 by about 2.3 percent, and earnings by over 11.6 percent.

Hedge Funds Buying

Strong subscriber growth is likely the reason why the number of aggregate 13F shares held by institutions climbed by 13.3 percent to approximately 134 million shares. However, the growth among Hedge Fund’s was even larger, climbing by nearly 31 percent to approximately 37.8 million shares. In total 48 institutions created new positions in the stock, while 68 added to existing ones. Meanwhile, 80 institutions decreased their holdings, while 34 exited completely.

The largest newcomer into the stock was Jackson Square Partners, LLC buying $182 million worth, while OZ Management, LP added $100 million worth. Most impressively, Slate Path Capital, LP bought $85 million worth, but that it made a 5.5 percent holding within the funds total portfolio, a big chunk.

Strong Growth Forecasts

Impressively, shares of the Times aren’t even expensive, with a one-year forward PE ratio of 23.7, and when adjusting that earnings multiple for growth, it trades with a PEG ratio for 2019 of 1.05. Earnings growth for 2019 is expected to rise by 22.5 percent on revenue growth of 4 percent. The strong growth is expected to continue into 2020, with revenue forecast to increase by nearly 4 percent, and earnings growth expected to accelerate to 24.5 percent.

The New York Times is not only alive and well, but is thriving in the digital era, while quietly piecing together a solid subscriber growth story.

 

This entry was posted on Monday, July 2nd, 2018 at 10:14 am and is filed under Stock. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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