Smell test

Arguably one of the most important considerations in any investment is the smell test. This is something that the numbers can't tell you. No matter how tantalizing a company may appear, no matter how covered its dividend is, no matter its earnings, buybacks, insider buying or cash position, if a company isn't going to remain a going concern you just can't buy it.

Torstar continually comes up in my scans as a company that should be worth consideration. No debt. Big dividend. Prem Watsa bought 10 million shares last year. Its traditional media business actually makes money. It appears better positioned than any other media company in Canada to survive. But will it?

It has a history of terrible digital investments. Its recent acquisition of the iPolitics site doesn't inspire confidence. Have you ever heard of this site? Me neither. It looks like any other media site from 2006 except that it's got social sharing buttons. If the comments sections are any indication, there doesn't seem to be much of that going on.  

Despite the survival of print channels until now, I don't see how they last much longer. I don't know anybody who buys newspapers, nor do I know anybody who knows anybody. Do you? Are they under 80 years of age? 

Pristine balance sheet and all, I can't picture a happy ending for Torstar. I hope that changes because the death of newspapers isn't good for anyone except the 45th POTUS.