New Operations Cut Media Firms’ Risk

Article Excerpt

The Internet has disrupted the historic business model of newspaper publishers and other information providers, competing against them for both readers and ad revenue. Thomson was early among media firms to recognize the change and adapt to it. That’s one reason why it was a favourite of ours in the 1990s (though we switched our advice to ‘hold’ several years ago). Torstar and Transcontinental are broadening their Internet activities. All three stocks have an attractive future, but only two are buys. TRANSCONTINENTAL INC. $19 (Toronto symbol TCL.SV.A; SI Rating: Average) is the seventh-largest commercial printing firm in North America. It also publishes newspapers and magazines, distributes flyers and other advertising materials, and operates several Internet sites. In the past few years, two-thirds of Transcontinental’s growth has come from its aggressive acquisition strategy. But under a new long-term plan, Transcontinental will probably make fewer acquisitions, and build up its existing operations. For example, Transcontinental plans to offer its printing customers more advisory services and special…

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