Nick Train spots future value in big media stocks

A decade after the technology boom, Nick Train has forecast a new bull market driven by changes in the online media sector.

The Lindsell Train founder, and co-manager of the £166 million Finsbury Growth & Income trust , believes only a tiny number of publishing houses will survive this new era, namely those that are able to navigate changes in the news business and at the same time maintain a loyal readership.

Two such companies include the Daily Mail & General Trust, publisher of newspaper the Daily Mail and Pearson, distributor of the Financial Times.

Since January, Train has built up a 3% stake in the Daily Mail & General Trust and explained it is the company’s anticipated evolution that makes it a worthwhile bet.

‘In the next five years the internet will become increasingly important,’ Train said. ‘There are some interesting strategies at the Daily Mail & General Trust and I think that even it does not know how long people will continue to read news via the medium of dead trees.

‘What is important is that they are looking at this and in seven years’ time we would strongly expect the Daily Mail to be one of the newspapers still around, regardless of its format.’

Like a number of news titles, Train pointed out the Daily Mail share price is still a long way off its £12 peak, which it reached in 2000. Over the last 10 years it has traded as low as £2.50, but it has since doubled and is priced £4.80 today.

Like the Financial Times, trust manager Train expects the Daily Mail to weather the imminent stormy patch in the sector, which could see a number of publications die out as the industry becomes increasingly web-based.

Train said: ‘There are only a couple of titles that genuinely have a worldwide prescience – the Financial Times and Wall Street Journal, which I think will still be read in the next 20 years, whether this is due to readers moving online or still flicking through their pages.’

Train added that the Daily Mail – a title he sees as acutely sensitive to the financial health of Britain’s middle class – enjoys similar recognition in the UK.