A Harty Stock Buy Following Steep Slide

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On Thursday, Meredith Corp. shares took a beating, as investors expressed worry over the media company’s fiscal 2020 forecasts, which came short of Wall Street analyst expectations. 


What’s a President and CEO to do?

Buy up shares on the cheap.

The company, which has a Local Media division comprised 17 broadcast television stations, and a National Media division home to a bevy of national lifestyle brands and their associated glossy publications, announced Monday (9/9) that President/CEO Tom Harty purchased 12,000 shares of MDP.

Harty did so on the open market at an average price of $35.02 per share.

That’s slightly above the $34.96 price seen for Meredith shares at the Closing Bell on Monday.

It marks the third time since Harty became CEO in January 2018 that the leader has purchased company shares.

But, the timing of this acquisitions will certainly raise eyebrows, as Harty bumps his stake in Meredith to nearly 100,000 shares of Meredith stock or stock equivalents.

“Over the last 18 months we have positioned Meredith for long-term revenue and profit growth,” Harty said.  “Personally, I do not believe our current share price reflects our potential, and that’s why I continue to invest personal funds in company shares.”

Tell that to Wall Street. Meredith expects full-year fiscal 2020 revenue to fall between $3 billion and $3.2 billion. That’s about equal to the $3.1 billion the Street has been expecting.

But, Meredith executives have warned that GAAP earnings from continuing operations will come in between $2.58 and $2.88 per share, while its adjusted earnings per share will likely be between $5.75 to $6.20. The consensus from analysts is $6.57, and that triggered a 25% one-day decline in MDP’s value, on Thursday.

The “reset” in financial expectations, as Harty phrased it on Sept. 6, were particularly troubling for one attorney who smells opportunity — whether it will transpire into anything legally or not.

The Law Office of Howard G. Smith late Sept. 6 announced an investigation on behalf of Meredith shareholders concerning Meredith and its corporate officers’ possible violations of federal securities laws. The firm believes its fiscal 2020 outlook and subsequent stock plunge on Thursday “injured” investors, and that a possible case exists.

On Monday afternoon, the law office confirmed it had filed a Securities Class Action on behalf of Meredith investors who held MDP shares between May 10, 2018 and Sept. 4, 2019.

The investors have until Nov. 5 to file a lead plaintiff motion.

The action from Howard G. Smith came as The Schall Law Firm; Kahn Swick & Foti; the Rosen Law Firm; Glancy Prongay & Murray LLP; Kirby McInerney; and Ademi & O’Rielly each conducted their own exploratory investigations on behalf of Meredith investors.

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