Janus Capital Corp. and Fidelity Investments, two of the biggest U.S. mutual fund companies, are taking opposing views on the New York Times Co.
Denver-based Janus, the best-selling fund group of recent years, was the largest buyer of Times shares in the second quarter, siding with those who say the "Gray Lady of 43rd Street" is an undervalued moneymaker. It trades at about 19 times forecast earnings, less than the Washington Post Co.'s 29 times and Tribune Co.'s 27.
"It is cheaper than a lot of newspaper stocks," said Martin Morris, an analyst and portfolio manager at Chicago Equity Partners. "They've had earnings estimates raised consistently over the last couple of quarters, and the stock is cheap on a price/earnings and cash-flow basis."
Fidelity fund managers may not share his outlook.
The biggest mutual fund company unloaded 1.1 million shares in the three months ended June 30, making it the second-biggest seller after Villanova Capital, according to the Carson Group, a New York-based research company that tracks holdings of institutional investors.
Villanova, the money-management arm of Nationwide Financial, sold 1.2 million shares amid concern a slowing economy and rising paper costs could crimp earnings.
In Monday's trading, the New York Times eased 19 cents to close at $39.38 on the New York Stock Exchange.