UPDATE: Compass Point Starts New Media Investment Group (NEWM) at Buy

March 7, 2014 8:41 AM EST
Get Alerts NEWM Hot Sheet
Price: $6.28 --0%

Rating Summary:
    2 Buy, 2 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 9 | Down: 8 | New: 17
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(Updated - March 7, 2014 8:44 AM EST)

(Brokerage name correction) Compass Point initiates coverage on New Media Investment Group (NYSE: NEWM) with a Buy rating and a price target of $18.00. New Media Investment Group was recently spun-off from Newcastle Investment Corp. (NYSE: NCT).

Analyst Jason Stewart said, "We view shares of NEWM as an opportunity to invest in a viable business strategy with a clean balance sheet at a price that appropriately reflects well known industry challenges. While technological advancement and the availability of free information has negatively impacted the U.S. newspaper industry, local content providers such as NEWM are still highly regarded in the markets they operate in. At a high level, NEWM’s business strategy is simple: implement technological improvements and make strategic acquisitions. The company has several levers to pull for growth, and unlike some of its peers, a clean fair value balance sheet and minimal leverage. Our 2014 and 2015 estimates reflect declining circulation volumes and lower advertising revenue per publication, which is in-line with industry estimates. Currently, shares of NEWM trade at a ratio of enterprise value to 2015 EBITDA of 5.7x, compared to peers who trade at 7.5x, despite better growth prospects and a lower debt-to-equity ratio. In addition to higher growth prospects, NEWM is expected to be the only dividend-paying publicly traded newspaper company. Our price target of $18 per share is based on an mean peer EV/EBITDA multiple of 7.5x our 2015 adjusted estimate."

For an analyst ratings summary and ratings history on New Media Investment Group click here. For more ratings news on New Media Investment Group click here.

Shares of New Media Investment Group closed at $14.55 yesterday, with a 52 week range of $-$.

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