Trinity Mirror has just bought Globespan - publisher of property information including homesoverseas.
It continues a string of purchases which entended TM's footprint in the property market. That isn't a bad strategy in itself - instead of allowing online media and magazines to take advertising away from the newspapers, TM has bought into the expanding property media universe.
But it's the timing which is breathtakingly awful. The day after the Nationwide index shows a fall in UK property prices - and shortly after DMGT says property ads are sagging - TM puts even more money into the property market.
If I were one of the selling shareholders of Globespan I'd be feeling very happy. And I probably won't be buying Trinity Mirror shares.
Friday 30 November 2007
Thursday 22 November 2007
Daily Mail as property indicator
The Daily Mail finally said yesterday what I've been waiting to hear for a while; property advertising is starting to flag.
Property ads have been one of the strongest areas for many papers, both national and regional, till recently. But it looks as if mortgage rate rises, the Northern Rock debacle and high price levels are having their effect. There's less volume - this has been confirmed to me by several agents - and agencies are now looking to reduce their advertising budgets.
Which makes Rightmove look very vulnerable. Despite a recent fall, the stock is still trading where it was in February this year. But if newspapers are feeling the pinch now, Rightmove will certainly feel it within the next six months. And with a PER of 54x according to DigitalLook's consensus forecasts, it's far higher rated than the newspaper stocks which trade around 10-15x earnings. Yet unlike the newspapers it has no other advertising areas to prop up its profits. Time to short it perhaps?
Property ads have been one of the strongest areas for many papers, both national and regional, till recently. But it looks as if mortgage rate rises, the Northern Rock debacle and high price levels are having their effect. There's less volume - this has been confirmed to me by several agents - and agencies are now looking to reduce their advertising budgets.
Which makes Rightmove look very vulnerable. Despite a recent fall, the stock is still trading where it was in February this year. But if newspapers are feeling the pinch now, Rightmove will certainly feel it within the next six months. And with a PER of 54x according to DigitalLook's consensus forecasts, it's far higher rated than the newspaper stocks which trade around 10-15x earnings. Yet unlike the newspapers it has no other advertising areas to prop up its profits. Time to short it perhaps?
Subscribe to:
Posts (Atom)