Stanford Group Pans Radio Stocks
January 21, 2009 at 5:52 AM (PT)
Media conglomerates were hammered TUESDAY on WALL STREET, along with the rest of the market, in a swoon that coincided with an 85-page report from STANFORD GROUP that was largely bullish on big entertainment companies, writes ADWEEK. STANFORD sees a 6% decline in U.S. advertising spending this year but said, "Large-capitalization media companies will weather the storm better than most."
Among their stock picks for 2009 are TIME WARNER, which sank 7% on TUESDAY to $8.94, and CBS, which fell 10% to $6.48.
Among the stocks panned by STANFORD were just about anything related to radio, with "sell" recommendations on ENTERCOM COMMUNICATIONS, EMMIS COMMUNICATIONS, COX RADIO and CUMULUS MEDIA.
While 90% of Americans listen to radio, STANFORD said, they are listening to less of it, and advertisers are retreating.
"The combination of pressured cash flow and heavy debt burdens could render the equity value of many radio stocks worthless," the analysts warn.