The New York Times today reports that Martha Stewart Living magazine is cutting the number of readers it guarantees its advertisers by 22% -- from 2.3 million to 1.8 million. The declining readership, of course, is tied to Martha's legal trouble and all the bad press it has generated.
There's a silver lining behind the news, however. Though the ad base is being cut, the magazine is actually going to jack up the rate it charges advertisers by 6%. While that may seem counterintuitive, it's a sign the company believes advertisers -- such as General Motors (NYSE:GM), Campbell Soup (NYSE:CPB), and Johnson & Johnson (NYSE:JNJ) -- realize the true value of those core 1.8 million readers.
Despite the uniformly bad press Martha has received since her sale of ImClone (NASDAQ:IMCL) shares became public, David Gardner's Motley Fool Stock Advisor recommendation of Martha Stewart Living Omnimedia (NYSE:MSO) has returned 61% vs. the S&P's 24%. David says he thinks the case against her is rather weak, but "I also believe that the company and its products and its partners and its customer base are in fact a lot bigger and more resilient than a single mortal. And that plays to shareholders' benefit, too."
Of David's 19 monthly picks in the history of the newsletter, 14 are beating the market's return. The average return of all his selections is presently 67.9% vs. 10.1% for the S&P 500, ranking his performance among the very best in the nation. If you're looking to improve your stock-picking skills while having fun along the way, he invites you to take a six-month money-back trial.
