Martha Stewart Living Omnimedia (NYSE:MSO) is an integrated content and commerce company that creates how-to content and domestic merchandise for homemakers and other consumers. The company operates through four business segments: Publishing, which consists of its magazine, book, radio and newspaper operations; Television, which produces television programming; Merchandising, which involves the design of merchandise and related packaging, promotional and advertising materials, and the licensing of various trademarks owned by the company , and Internet/direct commerce, which is comprised of the operations relating to the content and commerce businesses.
A surge of renewed interest propelled the share value of MSO higher last week after the CEO said the company is seeing better-than-expected advertising gains at its flagship magazine and is near a deal with a major cable company to air its lifestyle programming. Chief Executive Susan Lyne announced on Thursday that ad sales for Martha Stewart Living magazine likely will be up 35% compared with a year earlier as the publication strives to recover from a marketing slowdown in the wake of Martha's criminal conviction. In addition, the homemaking guru is going to return to television
with a daily production called "Martha," as well as a spinoff of Donald Trump's reality show, "The Apprentice" and the optimism surrounding Martha's renaissance is causing a rebound in the company's stock. Investors who agree with a positive outlook for MSO should consider this position, however it will not be listed in the OW Portfolio.
Fundamentals Chart Earnings Dates Analyst Ratings
Suggested (Bullish) Option Position:
Sell Put MAY 22.50 MSO-QX
Target Price = $0.30 Open Interest = 3477
Potential Profit (5 contracts @ $0.30) = $150
Initial Margin (5 contracts) = $3,945
Return on Investment (max) = 8.9%
Cost Basis in Stock = $22.20
Days to Expiration = 13