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The New York Times Company (NYSE:NYT), a media company based in United States, led the NYSE gainers with a relatively large price hike in the past couple of weeks. As a US$3.87B market-cap stock, it seems odd New York Times is not more well-covered by analysts. However, this is not necessarily a bad thing given that there are less eyes on the stock to push it closer to fair value. Is there still an opportunity to buy? Today I will analyse the most recent data on New York Times’s outlook and valuation to see if the opportunity still exists. See our latest analysis for New York Times
Is New York Times still cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 13% above my intrinsic value, which means if you buy New York Times today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $21.31, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since New York Times’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What does the future of New York Times look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted revenue growth of 5.99% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for New York Times, at least in the short term.
What this means for you:
Are you a shareholder? It seems like the market has already priced in NYT’s future outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on NYT, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.