SHE'S BACK
Martha Stewart Living Omnimedia shares on the New York Stock Exchange and notable moments in Ms. Stewart's legal troubles.
Behind the stock's run-up: a relatively short sentence for Ms. Stewart, and hopes that her release from federal prison later this week will drive advertising sales as well as enthusiasm for Martha Stewart products sold at Kmart Holding Corp. stores and two new television projects.
The stock buying has been driven by individual investors, some of whom might be getting carried away with the excitement over what Ms. Stewart's release might mean for her company. For now, revenue continues to plunge. And the most optimistic forecasts expect sizable profits to be at least two years away.
Indeed, among many large investors on Wall Street the question isn't whether shares of Martha Stewart Living Omnimedia are overpriced. The debate is over just how much. To wit, a stunning 6.9 million shares of the company's stock, or 36% of the shares that freely trade, were sold short as of last month, according to the Big Board. There has been so much demand by skeptical traders to borrow the stock to "short" Martha Stewart Living, and thereby profit from a fall in price, that it has become almost impossible to find shares to borrow, according to traders.
"La-la land," is how Credit Suisse First Boston analyst William Drewry described the company's stock price in a report late last month when shares were trading at $34.48 cents. Mr. Drewry, who has a $7 target price for the stock, noted that the company was trading at 10 times 2005 estimated revenue compared with a multiple of 13 for Yahoo Inc., a company with big profits, cash flows and operating margins, making Martha Stewart Living's shares "dramatically expensive."
Each of the five research analysts following the stock has a "sell," "underperform/market weight" or "underperform" rating on the company. Despite all that, the stock has done well, in part because of intense following Ms. Stewart still commands among consumers and individual investors. One sign of that: The average transaction in Martha Stewart shares this year has been valued at almost $17,000. In comparison, the average transaction for large-cap stocks on the Big Board is $59,000, according to Birinyi Associates, a Westport, Conn., stock-research firm. Another sign of the interest from small fries was the stream of postings yesterday -- more than one a minute -- on the stock's Yahoo message board with investors exhorting one another to buy and sell.
How expensive are the shares? The company has a market value of about $1.7 billion, but it is difficult to use traditional yardsticks, such as price-to-earnings multiples, because the company doesn't make any money. Martha Stewart Living had a loss of $1.24 a share last year, and is expected to lose 48 cents a share this year, according to analysts polled by Thomson Financial. The company is expected to squeak out four cents a share in profit in 2006. The company's stock was off about 5% yesterday.
What about cash flow -- which many in the media business refer to as earnings before interest, tax, depreciation and amortization -- a measure that many in the media business rely on? The company has negative cash flow right now. Even if Martha Stewart Living returns to its peak year of cash flow reached in 2001, the stock still should be priced at a market value equivalent to below $20 a share, according to some investors.
The hope of bulls: Ms. Stewart's planned television shows, and a renewed embrace by the public, will send magazine advertising, and product sales tied to the company, soaring. The company has said it expects to see advertising rebound for its flagship Martha Stewart Living magazine in the second quarter -- the first positive growth in nine quarters. In its important publishing division, management is effusive about its new culinary magazine, Everyday Food, which has increased its rate base to 800,000, up 60% since its launch in September 2003.
And the company says it has high hopes for a comeback in its television business after its syndicated show stopped airing in 2004. A new syndicated program is scheduled for launch next fall, and there are high hopes for the separate TV project "The Apprentice: Martha Stewart ," which is being produced for General Electric Co.'s NBC TV network by Mark Burnett.
But a big turnaround is needed. Last year advertising pages were down a staggering 47% from the previous year at Martha Stewart Living, which is responsible for nearly one-third of the company's revenue. Through February, advertising pages were down 23%.
And the company will receive only revenue, if any, from Ms. Stewart's slated "Apprentice" show for now. As for Kmart, Martha Stewart Living will receive payments above a fixed royalty fee only after it hits specific sales targets.
"We're focused on the long-term value of MSO," a company spokesperson said. "We believe the enduring appeal of the Martha Stewart brand coupled with our vast design and content libraries allows us to offer products and services to a broad audience. Distribution channels change, new platforms emerge, but great content is always in demand."
身陷囹圄 发财不误
牢狱生活对玛莎?斯图亚特 (Martha Stewart) 或许是件好事，至少对她公司的股票有好处。
一年前的 3 月 5 日，玛莎由于在出售 ImClone Systems Inc. 股票动机的问题上对调查人员撒谎而被宣判有罪，她的公司 Martha Stewart Living Omnimedia Inc. 也因此陷入混乱，股价一度跌至 10.86 美元。很多广告客户不愿在该公司的主打刊物上登广告，一些消费者也不愿意选择那些玛莎支持或推荐的产品。到去年夏末，公司的股价已跌到近 8 美元。
不过自从 7 月 16 日玛莎被判刑后，该股却开始一路飞升。截至周三，该股在纽约证交所的收盘价为 32.04 美元，期间累计上涨 170% 。而同期道琼斯媒体类股分类指数的涨幅仅为 10% 。也就是说，玛莎身陷囹圄期间，她所持有的 2,900 万股公司 A 类股票却升值 6 亿美元。
究其原因，是因为市场相信短暂刑期过后，玛莎的复出会极大提振公司的广告销售，带动 Kmart 货架上的该公司产品的热销，以及广大观众对两档新的电视节目的兴趣。玛莎本周即将从联邦监狱释放。
该股买盘主要来自散户投资者，有些人可能对玛莎获释对公司的意义兴奋不已。实际上，眼下该公司的收入仍在下滑，即使是最乐观的预期也认为至少两年后才能实现可观盈利。
的确，在华尔街许多大型投资者心目中，问题并非该股是否被高估了，而是具体被高估了多少。实际上，据纽约证交所的有关数据，截至上个月，该股目前的作空头寸占到其全部自由流通股的 36% 。
看跌交易员们纷纷借入该股进行作空操作以图来日获利。据交易员们透露，对该股需求之大已导致市场上几乎无股可借。
瑞士信贷第一波士顿 (Credit Suisse First Boston) 分析师德鲁里 (William Drewry) 在上月末的一份报告中将该股描述为置身“仙境”，当时该股股价为 34.48 美元。德鲁里对该股的目标股价为 7 美元。他指出，按 2005 年收入预期计算，该股目前的所谓“本益比”为 10 倍，而利润、现金流和经营性利润率都很可观的雅虎 (Yahoo Inc.) 本益比也不过才 13 倍。相比之下， Martha Stewart Living 的股价显得“异常昂贵”。
五位跟踪该股的分析师对该股的评级均是“卖出”或“弱于大盘”。尽管如此，该股却表现良好，部分原因在于玛莎在消费者及散户投资者中仍具有举足轻重的影响。其中一点可以说明：根据股票研究机构 Birinyi Associates 的数据， Martha Stewart 股票今年以来的平均交易额为 17,000 美元，而纽约证交所大型股的平均交易额也只有 59,000 美元。散户投资者对该股感兴趣的另一个信号是：周三在雅虎网站关于该股的讯息板上，不到 1 分钟就有一条投资者建议他人买进或卖出的发言。
该股到底有多昂贵呢？公司的市值约为 17 亿美元，但却难以用本益比等传统指标加以衡量，因为公司尚未盈利。该公司去年每股亏损 1.24 美元，接受 Thomson Financial 调查的分析师们普遍预计今年每股将亏损 48 美分。预计该股将在 2006 年每股盈利 4 美分。周三该股下跌了近 5% 。
现金流状况呢？这是衡量媒体公司业绩的重要指标，指的是利息、税项、折旧和摊销前收益。目前该公司的现金流为负值。部分投资者称，即使 Martha Stewart Living 重新达到 2001 年高峰时期的现金流状况，所能支撑的市场股价也低于 20 美元。
看好该股的投资者希望：玛莎计划中的电视节目以及她重获公众欢迎将推动同该公司有关的杂志广告和产品销售大幅增长。该公司曾表示，预计旗舰杂志 Martha Stewart Living 第二季度的广告额回升──是 9 个季度以来的首次增长。旗下重要的出版部门管理层对新出版的烹饪杂志 Everyday Food 寄予厚望，自 2003 年 9 月推出以来，该杂志的广告基准价格达到了 80 万美元，涨幅达 60% 。
公司协作参与的电视节目于 2004 年停播，但该公司表示目前对重返电视业务抱有很大希望。新的协作节目定于明年秋季推出，独立电视节目 The Apprentice: Martha Stewart 也被寄予厚望，由通用电气 (General Electric Co.) 旗下美国全国广播公司 (NBC) 的伯纳特 (Mark Burnett) 担任制作人。
公司业绩需要出现显著扭转。去年 Martha Stewart Living 的广告页面较上年锐减 47% ，而广告收入占公司总收入的近三分之一。至今年 2 月份，广告页面又减少了 23% 。
目前公司仅能从玛莎计划推出的《 Apprentice 》节目中获得收入。而在 Kmart 方面，只有实现具体销售目标后， Martha Stewart Living 才能获得相应收入。
该公司发言人称：“我们关注 Martha Stewart Omnimedia 的长期价值。相信 Martha Stewart 品牌经久不衰的魅力，包罗万象的设计及内容资料库将使我们能为广大受众推出各类产品和服务。分销渠道不断变化，新的平台不断出现，但精美的内容总是不可或缺的。”
