By: (AP) -- Investors pushed shares of Dow Jones & Co. higher Friday after investment giant UBS upgraded the newspaper publisher, saying it looks like a low-risk pick, given its lower stock price and modest advertising improvements with the launch of the Wall Street Journal's weekend edition.
The gains come a day after Dow Jones, which was the subject of intense takeover speculation this summer, traded on substantially heavier-than--usual volume Thursday, at more than triple the stock's daily average.
On Friday, the company's shares closed up $1.42, or 4.3 percent, at $34.38 on the New York Stock Exchange. Since the year began, the stock has fallen nearly 21 percent.
UBS earlier Friday upgraded Dow Jones to "Neutral," from "Reduce" and raised its price target to $33 from $31, saying "we no longer see further significant downside risk." UBS noted that Dow Jones' shares have lost about 20 percent since the rumors of dealmaking largely abated in September, while advertising trends have improved.
Advertising linage at the U.S. Wall Street Journal in the latest quarter, including two issues of the new weekend edition, increased 3.6 percent. Not counting the weekend edition, which appears on Saturdays, linage rose 0.6 percent.
Meanwhile, UBS said the markets are likely to start stirring takeover speculation again about Dow Jones, which is currently controlled by the Bancroft family, heirs of early owner Clarence Barron. The family's trustee has said in the past that the Bancrofts aren't looking for a buyer.
"While we've always said a deal could occur at any time, we remain skeptical that a takeover is imminent," UBS analyst Brian Shipman said in his client note. "We believe that the controlling Bancroft family's behavior over the last several years ... does not reflect a desire to sell the entire company.
"However, recent stock performance may spur new speculation that a deal could materialize," Shipman said.
Comments
No comments on this item Please log in to comment by clicking here