Bruce Hartman
CanWest Global Comm.
CGS-X
DON'T BUY
Sep 09, 2005
Intends to convert to a trust without the National Post. The newspaper business tends to be fairly cyclical. National and local advertising can be quite volatile depending on the direction the economy is heading in. This will require a lot of due diligence to understand how much leverage there will be in the trust and how cyclical it will be.
At this stage it is basically trading like an option on its survivability. Terrible balance sheet with about $4 billion of debt. Management has not been great.
Media space is a very tough one right now. Newspapers are suffering from declining advertising lines and readership. In the TV space a pay-TV provider went out of business today and local stations are closing down. High debt. Sell as a tax loss.
Massive spike on volume recently. Don't act on just a couple of days of action; you want a few days. If it continues to rise that would indicate momentum is starting to move in its favour. RSI index spiked into overbought territory. Would like to see a few more days of action.