NEWM is a BUY.

As a stock and option trader we come upon occasionally really nice opportunities for long term capital gains that say BUY ME and BUY ME now.   In some past postings we have mentioned this stock, but feel the need to do so again since their most recent earnings report was solidly what we expected and the stock began to make that move upward. 

New Media Investment Group is a spin off of another media company that did not want the slow growth newspaper business.  But slow growth does not mean no growth and certainly does not mean is not making money.  Newspapers have taken a bad rap in the last decade much of it due to the bad management practices of large chains that got into too much debt buying up large metro newspapers at a premium price.  Almost all the big newspaper chains are on a downward spiral and losing readers, losing revenue, and barely making enough money to pay for the debt load. 

That however is not so with the smaller newspaper business.  Small dailies in small towns and some larger non dailies are thriving.  Trust me on this one as we have almost 4 decades of experience in this field having retired from working with small dailies just like the ones we are posting about here.  If you do not trust us consider that Warren Buffet and several other billionaires are buying up smaller properties and seeking more as they see what we see and that is solid profits that can be reinvested and paid out to shareholders.  Solid profits such as 12% plus annually. 

Up to some time ago there were no publicly traded newspaper companies as far as we knew who specialized in this growing field of opportunity. New Media is the first we found and they are doing just fine.  They recently completed a share offering that boosted their cash pile as they seek additional newspaper buying opportunities.  We expect they will continue to buy newspapers and this time unlike the buyers in the 1990's buying spree they will be buying at bargain prices or at least at fair prices. NEWM  their stock symbol is a worthwhile long term investment here at just under $19.  Add in they pay just under a 6% well covered by cash flow dividend. 

What's not to like a good capital gains opportunity.  A stock that we believe could double in price over the next five years. A stock that pays a good dividend while you wait and add in solid management.  Now do not go out a load up all your portfolio on this stock, but do consider it as part of your overall diversified holdings.