Canadian Tire announced yesterday that they will be phasing out the print edition of their catalogue and replacing it with an online edition.
“all of our research was indicating that readership levels were decreasing and more and more people are on line,” Canadian Tire spokeswoman Lisa Gibson said in a telephone interview Thursday. “So that's why we decided to let people know on line and not make a big production.”
-Quoted from an article by John Partridge of the Globe and Mail
In my mind the above quote could easily apply to the print edition of Yellow Pages. Shares of YLO.UN have slid 30% over the last 3 months and as the yield creeps higher I’m increasingly being asked if I think now is a good time to buy YLO.UN. My short answer is that if you’re a long term investor I don’t think there is a good time to buy. In my next post I’ll explain my rational behind my don’t buy recommendation.
Friday, March 28, 2008
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4 comments:
I've also shared the same thoughts on YLO for quite some time and couldn't understand why all the so-called experts were recommending the stock to long term investors. Same thing about Davis + Henderson.
looking forward to your post. I think YLO will surprise a few people with how much staying power they actually have.
Make sure you look at their recent history of organic revenue growth from directories. Also their online push and operation of autotrader, canada411 etc.
YLO price is relecting general market fears associated with a recession. Its market premium has been erased as the market doubts its growth potential going forward. The comparision of CTC and YLO print materials is not exactly an apples to apples comparision but I think CTC did the right thing however I wouldn't discount YLO going forward. It is the Cdn market leader in direct printed advertisements. Demographics tells us that older generations will still prefer printed mediums over online formats. They want stuff that is easy and doesn't require alot of thinking. I know everyone complains about the goodwill on balance sheet but cash is king. Writing off goodwill doesn't effect cash flow only earnings. For an income oriented consumer discretionary stock, YLO is a decent choice.
Hi. I can not but mention that your blog is great. I see you have mentioned Canadian Tire here. I was thinking of getting some goods from the company but before I browsed the net for some detailed information about the company and its products. I looked for consumer feedbacks and I found some on this great site www.pissedconsumer.com. Look up the site for some hints.
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