Insider Concerns Just Created a Buying Opportunity in The New York Times Company (NYT)

On 12 February, shares of The New York Times Company (NYSE:NYT) closed higher after a volatile session. The shares accumulated 0.17 points or 0.54 percent at $31.42 with a heavy trade volume of 3.703 million shares. After opening the session at $31.51, the shares went as high as $32.02 and as low as $31.26, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $5.06 billion and now has 160.95 million shares outstanding. The New York Times Company (NYT) stock has gained 29.41 percent of market value in 21 trading days.

NYT stock has a trailing 3-year beta of 1.16, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $0.75 a share in the trailing twelve months. The stock’s value has surged 40.96 percent year to date (YTD) against a rise of 30.37 percent in 12 month’s time. The company’s shares still trade -0.41 percent away from its 1-year high of $31.55 and 47.24 percent up from 52-week low of $21.34. The average consensus rating on the company is 2.7, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

The New York Times Company (NYT) will probably climb -7.7 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $34 price as 12-month high target. This represents a whopping 8.21 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $30.5, which represents a return potential of -2.93 percent when compared to the closing price of the stock of $31.42 on Tuesday, February 12. The lowest price target for the stock is $18 — slightly more than -42.71 percent from NYT’s current share price.

History has shown that shares in The New York Times Company have gone up on 20 different earnings reaction days and are predicted to add 0.04 percent when the company reports upcoming earnings. Investors will get their next glimpse of NYT’s Q1 earnings on May 02. Analysts are forecasting revenue to suffer decline of -0.9 percent to $480M in the fiscal first quarter, while earnings are seen soaring by nearly -28.21 percent to $0.28 per share. It earned $0.15 per share, better than the $0.11, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $503M, better than the $480M analysts expected. Earnings are estimated to increase by 132.2 percent this year, 15.85 percent next year and continue to increase by 14.5 percent annually for the next 5 years.

Let’s take a look at some insider activity at The New York Times Company (NYSE:NYT) and see the pattern. The earliest insider trade took place on 11/15/2018. Thompson Mark parted with a total of 40 thousand shares of company at average share price of $25.9. The total for the sales was set at $1.04 million. After this transaction, the PRESIDENT & CEO account balance stood at 379.1 thousand shares. The stock grew 21.31 percent since that insider sale. On 11/08/2018, Benten R Anthony, SVP, Treasurer & Controller, sold 11.02 thousand shares at a price per share of $27.67. This removed 304.79 thousand shares from the insider’s fortune and the stock saw a 13.55 percent rally in value since the news became public. This transaction left 39.91 thousand shares in the SVP, Treasurer & Controller account.

On 11/05/2018, Director Sulzberger Arthur Jr performed a sale transaction worth $1.85 million. This sale at $28 each has eliminated 66 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded 12.21 percent increase since the transaction was reported. The insider now is left with 280.2 thousand shares remaining in the account. Denham Robert E, who performs the Director job, sold 3.49 thousand shares for $97.22 thousand. The disposal occurred on 11/05/2018 was priced at $27.84 per share. The share price soared 12.86 percent since the reporting date. Denham Robert E now left with a stake of 49.75 thousand NYT stock worth $1.56 million after the insider selling.

The stock is currently hovering around the first support level of $31.11. Below this, the next support is placed in the zone of $30.81. Till the time, the NYT stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 82.04 on daily chart, which may remain a cause for concern. If the price breaks below $30.81 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $31.87 mark may result into a pull-back move towards $32.33 level.

Shares of The New York Times Company (NYT) are trading at a P/E ratio of 41.51 times earnings reported for the past 12 months. The industry NYT operates in has an average P/E of 44.34. Its P/E ratio went as low as 29.61X and as high as 70.65 over the 5-year span.Further, it is sporting a 2.89 on the Price-to-Sales ratio. Compare this with the industry average P/S of 4.63. 62.6 percent is the gross profit margin for The New York Times Company and operating margin sits at 7.3 percent. Along with this, the net profit margin is 1.2 percent.