Research Firm Says to Avoid WWE Stock

World Wrestling Entertainment, Inc. (WWE) was recently trading at about $9.50 per share, near the low end of its 52-week range of from $14.90 to $8.67. Its market capitalization is about $720 million, and its P/E ratio is 17. It recently lowered its dividend to an annual rate of $0.48, for a yield of 4.7%.

In its third quarter of 2011, WWE's sales and profits from continuing operations were essentially flat when compared with the year ago quarter. But the reported earnings were actually down about 25%, due to a one-time $5 million charge in WWE's film division.

WWE's product is dated when compared to the various mixed martial arts formats available to the public. Overall weakness in the economy has not been helping matters, either.

Jim Cramer recently described WWE as a “wasting asset.” I agree with that, and with Cramer's opinion that there is no reason to own WWE. Avoid it.

source: seekingalpha.com