Although losers outnumbered winners in 2007, the Publishers Weekly Stock Index managed to eke out a 1.7% increase last year, thanks largely to Amazon.com. Shares at the e-tailer soared nearly 135% as investors were encouraged by the company's rapid sales growth, even as they still expressed concerns about Amazon's operating margins. At year end, the company's stock received another boost when Citigroup changed its recommendation from hold to buy, and set a stock price target of $119 per share, citing the company's dominant position in online shopping.
The stock fortunes of traditional bookstores fared much worse than Amazon last year, particularly Borders Group, which lost half its value in 2007. The retailer's stock price bounced around a bit in 2007, largely on takeover speculation, but finished the year near its 52-week low. Although Borders's new management team has made some progress in turning the company around, investors aren't likely to support the retailer until it starts to show improvement in its bottom line. Books-a-Million's stock price also tumbled badly in the year, though the company issued a special $3-per-share dividend this summer that paid out about $50 million to shareholders. Even bookstore leader Barnes & Noble couldn't escape the downward pressure on stocks in the segment—its stock price fell 13.2% in the year.
Among publishers, McGraw-Hill's stock price took the biggest hit in the year, although that was mainly due to concerns about the company's holdings outside of publishing.
One company disappeared from the PWSI in the year; MediaBay went out of business after its attempt to shift from a traditional book club for spoken-word audio to delivering digital downloads of audiobooks failed.
|Company||Dec. 29, '06||Dec. 31, '07||% Change|
|1. Adjusted for $3 special dividend |
Source: Reed Business information
|Franklin Elec. Pub.||2.10||3.15||50.0|
|Barnes & Noble||39.71||34.45||-13.2|
|Education Dev. Corp.||7.25||5.47||-24.5|
|Stock Index||482.73||491.17||1.7% 1|
|Dow Jones Aver.||12,463.15||13,264.82||6.4%|