MLG: A stock that I still like...and apparently, TheStreet.com does as well.... article here:
Musicland Stores
Kirk McCown (1/28)
Internet retailers will not be the downfall of bricks-and-mortal music retailers, just as pay-per-view and video rentals weren't the downfall of movie theaters, says Crestone Capital Management analyst Kirk McCown. He likes Musicland Stores (MLG:NYSE), which includes the Sam Goody, Suncoast Motion Picture Company and Media Play brand names.
The chain is a "powerful" turnaround story, he says. A few years ago the chain became overextended and the bottom line showed it. In 1998, the chain closed down 31 unprofitable stores while opening 14 new ones. The chain also has formulated an Internet strategy, which calls for multiple Web sites offering an array of entertainment products, including music, video, DVDs, licensed apparel, electronics and more.
Store closings have made top-line growth look less than impressive. Same-store sales rose only 6.7% in 1998. But the company has "solid steady momentum," says McCown, and the stock, at around 12, is inexpensive.
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I may be playing this one very soon. I have a friend that almost exclusively trades this issue and does very well.
TJ |
