Time Warner (TWX) Looks Tired

There were a number of positives in Time Warner's (TWX) results and call this morning. It's also true to say that it and some of the other Big Media companies are showing signs of life here in these last few weeks which they haven't for months.

However, I think it's noteworthy that TWX has given up its earlier 7% gain and is now up only 1% on the day. We'll see what happens in the days to come.

I think with TWX, investors are looking ahead and wondering what kind of company do they have post-AOL spin? The economy and ad market could keep recovering and help the stock. Networks are doing well. Film's been resilient but it's a hit and miss business. Publishing, despite good results for the last quarter, is likely going to continue to be operating in a weak environment. For me, as an investor, I find few reasons to be in Big Media compared to some other industries.

Position: None.

Originally published in RealMonday.com on 4/29/2009 3:43 PM EDT

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Big Media: Big Yawn

The advertising market continues to be severely weak. Yet, the fact that we're not in freefall has caused some of the most beaten down and debt-laden companies to be bid up in the last 6 weeks.

Names such as Harley Davidson (HOG), Royal Carribbean (RCL), Cemex (CX) and Lamar Advertising (LAMR) are all up big since March 6th (65 - 167% vs. 25% for the S&P).

Comparatively speaking, Big Media's returns over that time period look more modest. Yes, CBS is up 70% since early March, but it's still trading at less than $6, giving it -- to put it in perspective -- only a little more than double the market cap of what it agreed to buy CNET for last year.

News Corp (NWS) and Viacom (VIA) are up 35% since early March but lag the S&P over the last 6 months. Disney's (DIS) return since March 6th is 2 points less than the S&P's. And Time Warner (TWX) stock price (not including the dividend from the spin-off of Time Warner Cable (TWC)) is only up +2% since the great Bull Run began 6 weeks ago. Memo to Jeff Bewkes: where did my rally go?

The truth is that, although Big Media has been pummeled since this bear market began, it was never really priced for extinction (except maybe CBS, which is why it has bounced back as much as it has) like some of the other consumer discretionary plays. This "rise from the dead" rally hasn't let them participate.

Big Media is left priced for a severe long-term painful future, which is probably accurate.
Therefore, it's a space I'm avoiding.

Position: None.

Originally published in RealMoney.com on 4/28/2009 11:30 AM EDT

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