We live in a time that seems to worship the cult of the new -- the latest technology, the latest medical advances, the latest fashions, the latest YouTube sensation. But money can be made by well-run businesses that focus on the tried and true, while keeping up with changes in the marketplace.
Take, for example, Crown Media Holdings (CRWN). It owns the redoubtable Hallmark name as it relates to television. Its Hallmark Channel, a 24-hour-a-day cable TV network that reaches 84 million homes, provides such programming as movies, golden-oldies TV series (including Golden Girls and Little House on the Prairie), newer series (such as Cedar Grove and Good Witch) and annual specials. It also owns a sister network, Hallmark Movies & Mysteries.
Crown Media's revenues for the first quarter (ended March 31) were up 11% when compared to the same period a year ago and EPS went from 3 cents last year to 5 cents this year.
Another media performer worth noting is Scripps Networks Interactive (SNI). This company is involved with lifestyle content broadcast on television and the Internet, including HGTV, the Food Network and the Travel Channel. Its revenues in 2014 were $2.67 billion, up from 2013's $2.53 billion, while EPS jumped to $3.83 from the previous year's $3.40.
Neither company is particularly glamorous or trendy, but they are doing well and have well-priced stocks. I confirmed the strength of their financial performance by running them through my guru strategies, which are automated strategies I created that mirror how well-known investment gurus invest. One such strategy, which is based on Peter Lynch's writings, likes Crown Media, especially its P/E/G ratio, which is a measure of how much the investor is paying for growth. A P/E/G of up to 1.0 is acceptable, while Crown Media's is well below this at a desirable 0.58.
Note that Crown Media's daily trading volume is fairly small ($416,000), which means the stock may at times be fairly volatile. For this reason, I recommend you place a limit order when buying, in case there is a temporary sharp run-up in the stock price.
Scripps gets high grades from my Joel Greenblatt-based strategy. It looks at earnings yield and return on total capital, and combines these two variables to calculate a ranking of a stock when compared with all the thousands of stocks in our database. Scripps does exceedingly well with a high ranking of 27.
Neither of these companies has the magic dust of Silicon Valley sprinkled on them, but that, to my mind, makes them very appealing. They are proven, well managed and growing, with well-priced stocks, and are well worth considering in today's market.