At the recent Macquarie Conference NEC provided earnings guidance for the first time which fell short of expectations but the stock remains anchored to the $2 area i.e. there’s plenty of bad news built into the share price. The company disclosed that the advertising market declined 15% in the 3rd quarter, although they managed to pick up more than 2.5% in market share. Not surprisingly in today’s soft economic environment, they anticipate much of the same in Q4. We believe NEC remains exceptionally cheap and patient investors will be rewarded, this stance is helped by the expected 7% yield over the next 12 months.
- We would need a foray down toward 2022 lows to increase our position or consider the stock for our Flagship Growth Portfolio.
MM is long and bullish NEC in our Emerging Companies Portfolio
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