Wells Fargo Securities had a lot of great things to say about magazine/TV operator Meredith Communications. If there’s a problem, it may be that many see some nice things.
And that has implications for its stock price.
For starters, WFS says that it is hats off to Meredith’s local television group, which despite accounting for something in the neighborhood of a fourth of the company’s revenue, still generates a hefty 50% of its EBITDA. Strong decisions on station acquisition and the still-on-the-rise transmission consent income stream are factors, as is capitalizing on the benefits of duopolies in markets where the company has them.
The magazine division still earns high praise for managing to stay in the black in an incredibly challenging era for print. Again, what WFS calls “bolt on” M&A activity is a strong part of it.
Digital is being handled well, too, producing a steadily-increasing income stream.
In short, WSF has nothing but high praise for Meredith’s highly effective management team and strategic profile.
The problem? Unlike a lot of communications stocks these days, Meredith’s stock seems to be priced not only fairly, but on the high end of its value range. So there is no opportunity to cash in on an under-valued company.
