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Value

It's been a tough few years for the newspaper industry. But The New York Times Company is expected to see earnings growth in 2012. This Zacks #1 Rank (Strong Buy) is also a value stock, with a forward P/E of just 11.3.

The New York Times is a multimedia news operation which operates The New York Times, the International Herald Tribune, The Boston Globe, NYTimes.com, BostonGlobe.com, Boston.com, About.com and other properties.

Big Beat In Q1

On Apr 19, The New York Times reported first quarter results and crushed the estimate by 300%. Earnings per share were 8 cents compared to the 2 cent estimate. That was also much better than the first quarter of 2011 where the company made zero cents.

Revenue actually decreased by 0.3% to $499.4 million from $500.7 million as advertising revenue fell 8.1%. However, the company is making it up in circulation, as it expands its digital subscription base. Circulation revenue climbed 9.7%.

The company recently switched from 20 free monthly articles for its flagship The New York Times to just 10 articles which is spurring a greater number of people to subscribe digitally (myself included.)

Since the end of the fourth quarter of 2011, paid subscribers to various digital subscription packages of The New York Times and the International Herald Tribune rose 16% to 454,000. Paid subscriptions to BostonGlobe.com and The Boston Globe jumped 13% to 18,000.

Outlook For Q2

Advertising revenue in the second quarter is expected to remain similar to that of the first quarter.

But total circulation is expected to increase in the high-single digits due to growth in digital subscriptions as well as print price increases implemented in the first half of 2012.

Zacks Consensus Estimate Rises For 2012

Over the last 60 days the 2012 Zacks Consensus has increased 2 cents to 71 cents.

This is earnings growth of 5.5% as the company made 67 cents in 2011. That is higher than the average growth in the industry which is just 4.2%.

Shares Beaten Up

After hitting new highs in 2011, shares have sold off in 2012 with the exception of a very recent bounce back.

Even with the recent rally, The New York Times still has plenty of value.

Along with a P/E under 15, which is the cut-off I use for value, it also has a price-to-book ratio of 2.1. A P/B ratio under 3.0 can indicate value.

The company also has other solid fundamentals including a 1-year return on equity (ROE) of 18.8%.

For investors looking for a value stock in the media space, they should consider a look at The New York Times.

This Week's Value Zacks Rank Buy Stocks

It has paid to own department stores since the Great Recession. Dillard's Inc. (DDS) recently reported record first quarter results and is expected to grow earnings by 37% in fiscal 2012. Despite shares near multi-year highs, this Zacks #1 Rank (Strong Buy) still has value with a price-to-sales ratio of only 0.5. Read the full article.

Intersections, Inc. (INTX) is cashing in on the growing awareness surrounding identity theft as it's expected to grow earnings by the double digits in 2012. This Zacks #1 Rank (Strong Buy) has value with a price-to-sales ratio of only 0.8. Read the full article.

I can't believe I'm writing about another airline but Spirit Airlines (SAVE) has game. It is expected to post double digit earnings growth in 2012 and is also a value stock. This Zacks #1 Rank (Strong Buy) has a forward P/E of just 10.5. Read the full article.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at @TraceyRyniec.

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