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Smithfield Foods, Inc. (SFD), Caesars Entertainment Corp (CZR): Will the Deen Debacle Devastate Your Stocks?

Unlike its competitors Las Vegas Sands Corp. (NYSE:LVS), MGM Resorts International (NYSE:MGM), and Wynn Resorts, Limited (NASDAQ:WYNN) it has no real Macau exposure except for a golf course. Both Wynn and Las Vegas Sands Corp. (NYSE:LVS) are much better buys for casino exposure.

What of the two competing media companies, Scripps Networks Interactive, Inc. (NYSE:SNI) and Liberty? Scripps Networks Interactive, Inc. (NYSE:SNI) trades at a 14.71 trailing P/E and has a yield of .90% and a PEG of 1.27. It owns both premium paid content like DIY Network  as well as its cable content of the aforementioned Food Network and other lifestyle channels like HGTV.

Of all these companies, Scripps Networks Interactive, Inc. (NYSE:SNI)’s Food Network will have to do the most shuffling replacing Deen’s popular shows. The next earnings release may even show a drop in viewership hitting the bottom line. The company had already seen declining ad revenue due to a drop in viewers before the Deen controversy.

QVC, a home shopping channel, may drop Deen in the next few days. Liberty Interactive (Interactive group) (NASDAQ:LINTA)’s stock is five per cent off its 52 week high of $24.31 and is trading at an 8.46 trailing P/E with a 1.07 PEG. QVC only trails e-tail giant Amazon.com, Inc. (NASDAQ:AMZN) in e-commerce sales and a new mobile app should nudge sales higher. QVC is moving into international markets, just recently inking a joint operating agreement with China National Radio.

The company operates in two divisions, Liberty Interactive (Interactive group) (NASDAQ:LINTA), operating the video and websites and Liberty Ventures, which holds interests in Trip Advisor, Expedia, and Time Warner. Caveats are a high (not good) corporate governance risk rating of 10, mainly on shareholder rights and compensation.  It also has a complicated relationship with Liberty Media Corp (NASDAQ:LMCA) with which it shares headquarters and CEO Greg Maffei. One could characterize the two companies almost as media hedge funds.

QVC is not as reliant on Deen as Food Network so little impact there. QVC has 69% market share of the home shopping market, outpacing rival HSN, Inc. (NASDAQ:HSNI) which operates the Home Shopping Network.

A hit to the breadbasket

Paula Deen Enterprises has taken a major hit to the breadbasket. . At the very least, the embattled grandmother is probably wondering why she ever bothered to leave the house so many years ago.

Days and weeks from now this will all die down but Smithfield Foods is already in play and the easy money made. Caesars Entertainment Corp (NASDAQ:CZR) is a no-touch with better casino stocks to pick.

Of the two media companies, Liberty Interactive (Interactive group) (NASDAQ:LINTA) is making money hand over fist with QVC and has a lower PEG and P/E than Scripps Networks Interactive, Inc. (NYSE:SNI) and it’s making strides internationally.


AnnaLisa Kraft has no position in any stocks mentioned. The Motley Fool recommends Scripps Networks Interactive (NYSE:SNI).
AnnaLisa is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Will the Deen Debacle Devastate Your Stocks? originally appeared on Fool.com is written by AnnaLisa Kraft.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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