Clear Channel Outdoor Shares Popped: What You Need to Know
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of billboard guru Clear Channel Outdoor (NYS: CCO) are sending a clear message today by rising as much as 15.7% on very heavy volume.
So what: Or perhaps the signal isn't all that clear: An early jump on terrific second-quarter results was followed by a rapid retreat after the customary analyst call, and Clear Channel is actually trading just 3% higher as of this writing. And the stock was exploring 52-week lows to begin with.
Now what: The traditional advertising industry is suffering as a whole. A basket of sector stocks including Clear Channel, Lamar Advertising (NAS: LAMR) , AirMedia Group (NAS: AMCN) , Harte-Hanks (NYS: HHS) , and National CineMedia (NAS: NCMI) would have lost out to the S&P 500 over the last year with a negative 14.4% return -- and that's with dividends reinvested. It's no short-term pain either, as the projected annual losses on that mock portfolio grow to 15.1% on a five-year time scale. In both thought experiments, every single stock mentioned has failed to beat the market. As advertisers embrace online marketing channels, I don't see an end to this pain anytime soon, lest these traditionalists make a leap into the digital realm themselves. Don't hold your breath while waiting for Clear Channel or Lamar to beat Google (NAS: GOOG) and Yahoo! (NAS: YHOO) in the online ad market.
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At the time this article was published Fool contributor Anders Bylund holds no position in any of the companies discussed here. The Motley Fool owns shares of Yahoo! and Google. Motley Fool newsletter services have recommended buying shares of Yahoo! and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is investors writing for investors.
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