Trump has repeatedly bashed the illustrious newspaper. And whether you’re a fan of its editorial style or not, there’s an investment case to be made. So let’s go over some facts….
Why The New York Times (NYSE: NYT) is a Leader
The New York Times is the 3rd most syndicated newspaper in the U.S. It’s won 125 Pulitzer Prizes (more than any other news company). And it’s adapted very well to an online-first business model.
For example, in 1993 NYT had 1.2 million papers in circulation. Today, that number is only 600,000. But paid online subscriptions shows a different story.
The New York Times boasts a whopping 4.3 million paid subscribers worldwide. In five years, the company expects that number to grow to 10 million subscribers.
Let’s look at how its digital business is driving its revenue.
About a year ago, the Times revenue was about $1.7 billion. Of this, $709 million was generated by its digital-only business. That represented a 14% growth over a year prior.
During the same time, net income skyrocketed from about $4 million to $126 million. And cash flow almost doubled from about $87 million to $157 million.
As you can see, the business is growing… and fast.
And continuing its legacy of adapting, NYT recently released a FX/Hulu TV show called The Weekly, pulling in younger and newer audiences.
What You Should Do
NYT has doubled since Trump has been in office and almost quadrupled since 2011 (leaving the S&P 500 in the dust, which gained 92% in the same period).
There are signs that it will rise even further. Beyond the subscription count, we also have to take a bigger picture look at what the Times is trying to achieve here.
It’s moving beyond just being a newspaper to becoming a direct-to-consumer digital subscription business. This is the same model that Spotify and Netflix use…the subscription economy. But The New York Times doesn’t have to pay royalties like Spotify. And it spends about half of what Netflix does on advertising.
All in all, you’ve got a company that could only be at the beginning of its dominant rise.
-Investing Insider Magazine