With the surging popularity of tablet devices (Apple sold 15 million last quarter) and eReaders, now is not a good time to be in the traditional printing business. In fact, it may never again be a good time to be in the traditional printing business as we approach closer and closer to the long touted "paperless society". Printed materials of course are never going to go away completely, but Fortune 500 companies that make printed materials as a core function of their business probably will. Case in point: R.R. Donnelley & Sons (ticker: RRD) is down 22% for the year (worst in the S&P 500) and is down 76% from its high back in 2007. Here's the list of the bottom 10 performers:
RRD is suffering from a similar evolution of technology as is Kodak (ticker: EK and
which we last discussed on 1/4/2011), they're just a little further back in the cycle. One company that has done a good job of diversifying itself from the traditional printing business is McGraw-Hill (ticker: MHP). MHP is the parent company for S&P and I also think that MHP owns and produces more of the actual content than RRD. Another large company in the sector is Gannett (ticker: GCI) who has been performing better as of late, but like RRD, has struggled with the transition from print to digital. Here's a comparison chart of the three:
No comments:
Post a Comment