Ching buys MEG 13.8: We wrote it before and we'll write it again: avoid Media General Corp.

The result may be closer to a wash than many investors were hoping for. There will be higher revenue and higher income, obviously, but there will be higher interest payments too. For that reason, we recommend they take a pass on shares of Media General because shares are too expensive in light of the low level of operating profit and the significant risks here. This is very optimistic in our view, especially in light of the fact that the company has generated basically flat earnings for some time. If the forward multiple is too low, that's one sign to us that the market may be too optimistic.


Lawanda:
If management achieves the goals imposed on them by a hopeful audience, shares will likely not move much as expectations are already priced in.

Austin:
This situation represents the worst possible payoff to shareholders.

Magali:
If the market has great expectations for a company, shares will be bid up in anticipation of great things.

Avelina:
The problem is that shares sometimes behave according to rules that don't make sense.

Sharen:
Investors can only access company cash flows through the purchase of shares that supposedly represent the fortunes of the underlying business.

Alma:
To us, that equals risk and further reason to avoid the name.

Parthenia:
That won't always be the case, but nothing can go wrong at this point.

Jacki:
At the moment, operating profits are being swamped by the interest expense.

Ada:
Staff redundancies must be handled perfectly well, and so on.

Crystal:
Redundant stations had better be sold at the right price.

Media General (NYSE:MEG)
//stockhand.net/us/?q=nyse%3Ameg&id=479958