Can Big Media Companies Continue To Prop Up Their Stocks With Buybacks?

Most Wall Street analysts, eager to sell stocks, pull their punches when faced with questions that might lead to uncomfortable conclusions. But Bernstein Research’s Todd Juenger and MoffettNathanson Research’s Michael Nathanson have proven their fearlessness over the years — which is why I was so pleased to see both out this morning with thoughtful reports that reach different conclusions about a key question: How much longer can the go-go period for media stocks last? Shares have been on a tear for the last three years largely because moguls stopped using cash to build empires choosing instead to slim down (as News Corp/Fox did, and Time Warner is doing, by unloading their publishing units and CBS is doing with its billboard ad business) and returning cash to shareholders. Stock buybacks in particular “have been enormous,” Nathanson says, with Viacom cutting the number of outstanding shares by 21% followed by Time Warner (-17%), Discovery (-16%), Scripps Networks (-12%), News Corp/Fox (-12%), CBS (-11%), and Disney (-6%). (more…)

This article was printed from https://deadline.com/2013/10/can-big-media-companies-continue-to-prop-up-their-stocks-with-buybacks-610938/