Martha Stewart should check her ego and find a buyer for Martha Stewart Living Omnimedia.
I just looked at the company's latest fundamentals, in particular the balance sheet and the cash flow statements for the most recent periods.
During the last 12 months, the cash flow statement shows the company burned through $8.3 million of cash or about $690,000 a month. In other words, the company had negative free cash flow. Also, the most recent balance shows the company had about $51 million of working capital. So, all of this means that if the company continues to burn cash at the same rate going forward, as in the previous 12 months, it will run out of cash in about six years.
Now, six seems like a long time for the company to turn itself around - and I would agree with this. However, the company has already had years and years and years to turn itself around. This is why I think Martha Stewart Living Omnimedia should simply try for a brand new start and find a buyer. Obviously, Martha Stewart, the executives and the Board can't do it. So, I think a new buyer with totally news ideas should be brought in to turn around this struggling company.
As an investor, I look at a company's fundementals first and foremost. And in the case of Martha Stewart Living Omnimedia, it past and present numbers and trends don't like.