Financial Trading Blog
Stock of the day 15/12/2015 – Trinity Mirror PLC
After opening 2015 at £1.60 things actually got off to a solid start for Trinity Mirror. Steady gains across January accelerated in February, investors apparently pleased that the company were taking steps (this time axing both the Formby Times and the Crosby Herald) to combat falling ad revenue across its titles. Add on that an apology from the company to the victims of its phone-hacking malpractices, and a 1% rise in full year pre-tax profits to £102.3 million (despite a 4% fall in revenue to £636.3 million) and Trinity Mirror had climbed to a year (and 6 month) high of £2.06 by the start of March.
(Source: IT-Finance.com 15/12/2015)
Yet the company quickly fell from this peak, a sharp tumble in the few days after its full year report leading to a more gradual decline, leaving Trinity Mirror to trade at around £1.88 by the middle of May. The stock then had to undergo another precipitous fall on May 21st, when it was revealed that Trinity Mirror had more than doubled its phone-hacking payout kitty (to £28 million) following a ruling from the high court stating the paper publisher must pay £1.2 million to 8 different celebrities.
This news left the stock at £1.50 by the start of June, with a brief surge back to £1.63 lost when Trinity Mirror revealed it was doubling its planned cuts to £20 million in order to offset tumbling print revenues. This put the company on a path to hit a 21 month low of £1.29 by the end of July, only to rocket back up by nearly 20% in the aftermath of a August’s update, with Trinity Mirror stating that it would meet 2015 profit forecasts despite an 8.7% drop in first half revenue.
Yet the market chaos of August and September soon left Trinity Mirror back at £1.34, before Local world-takeover rumours lifted the stock back above the £1.50 mark. The confirmation that Trinity Mirror would be buying Local World (for £187.4 million) to create the UK’s largest, 180 title strong, regional group then helped push the stock to a near 6 month high of £1.83 by the middle of November. However, as has been the case for most of the year, these highs couldn’t last long, and news that the group’s daily browsers had fallen 2.2% across October left the stock bouncing around the £1.65 mark. Trinity Mirror sits a current trading price of £1.66 (IT-Finance.com, 14/12/2015).
Trinity Mirror PLC has a consensus rating of ‘Hold’ with an average target price of £2.28.
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