NY Times shares hit record after Berkshire stake disclosure. Are they worth buying?
New York Times shares hit an all-time high after Berkshire Hathaway disclosed its stake in the media company / Photo: MikeDotta / Shutterstock.com
Shares of The New York Times media corporation jumped 1.1% in opening trading on Feb. 18 to an all-time high after Berkshire Hathaway disclosed its stake in the company while reporting fourth-quarter deals, the last under Warren Buffett.
Berkshire has opened a new position in NY Times, buying about 5.07 million shares for $351.7 million. This is about 3% of the media company's capitalization, writes Motley Fool. NY Times securities took 0.13% of the investment fund's portfolio.
Over the past three months, the company's quotes have added almost 17%. As the Motley Fool notes, during parts of the fourth quarter, the stock traded near the $50 mark and has gained more than 35% since those levels.
Berkshire returned to the media segment after exiting the business in 2020, at which time Buffett believed the traditional media market was in long-term decline, the Associated Press recalls. At the same time, the investor, who started his career as a newspaper distributor, owned shares of the Washington Post for 40 years, writes Barron's.
Since Buffett has typically managed deals worth more than $1 billion, given the size of his investment in the NY Times, it's unclear whether this purchase was a decision by the legendary financier himself or another investment manager at the company, the AP notes.
According to Motley Fool analysts, two long-term factors that may have guided Berkshire's decision were the NY Times' reputation as a trusted source of information in an era of increasingly AI-driven content, and the company's growing focus on video content.
Motley Fool analysts believe that NY Times shares do not look either overpriced or very attractive. Investors may be better off adding these securities to their watch list in anticipation of a more favorable entry point, the publication writes. Wall Street is generally moderately optimistic about the company, Marketwatch data shows. Six of 12 analysts recommend NY Times shares to buy, and five suggest keeping them in the portfolio. To sell - advises one analyst.
At that, the average target price is $70.8, which implies a 4% drop in quotations relative to the previous closing level on February 17.
This article was AI-translated and verified by a human editor
