Shorter? Oh, short. Got it. Wink, wink. Martha knows best!
Maybe I'm reading too much into this. Martha really can't be telling me to short shares of her own company? Can she? Let's turn to Barbara for perspective. She offers a glowing view of Martha's world. It pains me to stomp these gingerbread houses.
However, it appears that the company is peaking and I'm not afraid to say so. The bottom line is falling. The top line will follow suit. Sales shot up 35.5% last year. Great. This past quarter? Sales were up just 17%. It's dangerous for Barbara to cling to her 21.75% long-term growth rate when the trend is going the other way.
I'm still worried about the Martha dependency factor. Barbara doesn't console me by pointing out that Omnimedia only carries $67 million in executive life insurance. Great. The company is worth $1.38 a share if Martha were to expire. That insurance is no assurance.
Barbara points out that a "large effort has been made to leverage the other talent in the company" but I don't see it? It's AskMartha this, Martha Stewart Living that. The company really has little choice in the matter. If it were to become a more anonymous company with many voices the consumer would move on. Why would they stick around to hear a "Get thee to Ethan Allen and Restoration Hardware" message.
The company without Martha is nothing more than a Time Life series for soccer moms. I say this only because I know I would get severely flamed if I branded Martha a freethinking June Cleaver. Martha matters, and that is why it is important to accept that the day will come when Martha doesn't matter. Omnimedia will not matter. Your decision as an investor, to buy or sell, will matter.
So, snuggle up by the fire and enjoy tonight's Home for the Holidays special. Revel at Martha's mother's secret sugar cookie recipe. Make your own snow globe. Just remember the downside to snow -- it eventually melts away.
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