Obviously, I was wrong. But it IS surprising to me how the rest of the sector is remaining strong (GCI and LEE, in particular), while MNI corrects. That divergence will have to reconcile itself soon....either through MNI going UP....or the whole sector coming down. (I strongly suspect the former.)
What's not to like about a stock selling at little more than ONE TIMES next year's earnings???! And, truth be told: I LOVE THE LEVERAGE! [lol] Because I wouldn't otherwise, as an equity holder, be able to buy the cash flow "so cheap."
No one is going to take this company away from us. The future profits (above and beyond interest expense) are going to be OURS TO DO WITH AS WE PLEASE. I love that!!
Just don't bother trying to figure it out. Keep telling yourself the profits aren't real. Sure, cost cutting is Draconian, but MNI is lucky. Most industries that lost 30% of their revenue quarter over year ago quarter, are not ABLE to do the kind of cost cutting MNI did.
The numbers are real. It's just your stubborn unwillingness to believe them that is the problem.
I have a hard time seeing it get back down to about 1x earnings (at $1.35 onthe stock, annualzing the 30 cents they earned in the latest quarter, gets you to 1.1x).
I don't understand why some people don't understand MNI "earnings are not REAL their just paper earnings" If I sell everything I make payments on and I have money in my pocket now at the end of the month, I didn't EARN more money I just have less things and soon may have nothing more to cut. As they cut more people and hours they will get smaller and smaller.
I also increased my position about 10%, and bought more at $1.96-2.03 today. It seems hard to think, with the strength in LEE, that MNI, which has historically traded at a premium to LEE, doesn't have upside back to $2.25-2.50 in here. (Or perhaps LEE has downside?)
I have a hard time seeing it get back down to about 1x earnings (at $1.35 onthe stock, annualzing the 30 cents they earned in the latest quarter, gets you to 1.1x). It's currently selling for about 1.7x the "run rate"....while LEE is at 4x the run rate, and GCI is at 5x the run rate.
I'm not sure which is my favorite in the space, but it's between MNI and AHC right now. (I increased my position by 30% in AHC today.)
I plan to triple my exposure at $1.35 once this stock touches that in the next three weeks. Seems like the air is slowly leaking from this stock, as predicted. This will be an $8 stock sometime in the next year, but not straight up from these levels.
It's not quite right to say there is "strong support" at a level just reached a few weeks ago.