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Meredith's (MDP) Strategic Initiatives Driving Stock Higher

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Meredith Corporation has outperformed the Zacks categorized Publishing-Periodical industry with year-to-date return of 29.7% compared with 19.9% for the latter. In fact, if we look at the company’s performance in the one month, the stock has surged approximately 22%. The growth is mainly backed by the company’s strategic initiatives, solid surprise history, upward estimates trend and strong financials.

In order to expand its media portfolio the company has been making strategic investments as well as acquisitions and partnership deals. Some of the important acquisitions in fiscal 2015 include Shape magazine and the digital assets of Shape, Natural Health, and Fit Pregnancy brands from American Media Inc. The company integrated Shape with its Fitness magazines. The company revamped few magazines in its portfolio including Family Circle, MORE, Wood Eat This, Not That! and Parents Latina.

Meredith has been impressing investors consistently with its earnings performance over the last twelve quarters. The company’s first-quarter fiscal 2017 adjusted earnings per share of 75 cents outperformed the Zacks Consensus Estimate of 72 cents and soared 44.2% year over year. The company’s results in the reported quarter were driven by robust political advertising revenues and growth in digital advertising revenues in both national as well as local businesses.

Management expects fiscal 2017 earnings to be in the band of $3.50–$3.80 per share. Further, second-quarter fiscal 2017 earnings per share are anticipated to be in the range of $1.18–$1.23 compared with earnings of 80cents reported in the prior-year quarter. Second-quarter results will be driven by robust political advertising revenues.

Following, robust first-quarter fiscal 2017 earnings the company witnessed upward estimate revisions. In the past 60 days, the company’s fiscal 2017 estimates have moved up to $3.70 from $3.68. In the same time frame, second-quarter fiscal 2017 earnings estimate have also increased to $1.21 from $1.18.

MEREDITH CORP Price, Consensus and EPS Surprise

MEREDITH CORP Price, Consensus and EPS Surprise | MEREDITH CORP Quote

On the flip side, with advancing technology, the print media is on a decline. Shift to online is likely to put enormous pressure on Meredith’s magazine portfolio. Though the Zacks Rank #3 (Hold) company is expanding its digital presence, it will take time to complete the transition.

Stocks to Consider

Stocks which warrant a look in the retail space include Burlington Stores, Inc. (BURL - Free Report) , Zumiez, Inc. (ZUMZ - Free Report) and Ross Stores, Inc. (ROST - Free Report) . Both Burlington Stores and  Zumiez sport a Zacks Rank #1 (Strong Buy), while  Ross Stores carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Burlington Stores delivered an average positive earnings surprise of 25.6% in the trailing four quarters and has a long-term earnings growth rate of 19.9%.

Zumiez delivered an average positive earnings surprise of 30.9% in the trailing four quarters and has a long-term earnings growth rate of 15%.

Ross Stores delivered an average positive earnings surprise of 5% in the trailing four quarters and has a long-term earnings growth rate of 11.4%.

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