Directory Stocks Surge: Can the Yellow Pages Really Be So Hot? DEXO, SPMD, YLO

On Wednesday, directory and yellow pages stocks Dex One Corporation (NYSE: DEXO) surged 101.56%, SuperMedia (NASDAQ: SPMD) surged 33.51% and Yellow Media (TSE: YLO) surged 27.54% after reporting earnings on Wednesday and Thursday. So who said that the yellow pages was a no growth or dead industry! On the other hand, does a one day surge suddenly make DEXO, SPMD and YLO hot enough to buy? Here is a closer look at all three directory and yellow pages stocks to help you decide on an investment strategy:

Dex One Corporation (NYSE: DEXO)

Dex One Corporation, formerly R.H. Donnelley Corporation (before it emerged from from Chapter 11 and was named Dex One), is a marketing services company that helps local businesses to reach consumers through a network of local marketing products such as print, online and mobile yellow pages and search solutions plus search engines. On Thursday, Dex One Corporation surged 101.56% to $1.29 (DEXO has a 52 week trading range of $0.36 to $9.42 a share) for a market cap of $65 million. Investors should be aware that Dex One Corporation has lost over 80% over the past 52 weeks, EPS of negative $19.12, book value of negative $0.36, quarterly revenue growth (yoy) of 134.50% and pays no dividend. On Thursday, Dex One Corporation reported that net income, cash flow from operations and total debt for 3Q2011 came in at $22 million, $82 million and $2,552 million respectively. Dex One Corporation executives stated that 3Q2011 financial performance was in line with expectations, ad sales guidance was marginally exceeded and the company is making steady progress towards a goal of returning to growth - albeit more slowly than originally expected.

SuperMedia (NASDAQ: SPMD)

SuperMedia, formerly Idearc Inc., is a yellow pages directory publisher in the US and it offers online advertising solutions. On Thursday, SuperMedia rose 33.51% to $2.47 (SPMD has a 52 week trading range of $1.15 to $12.63 a share) for a market cap of around $28 million. Investors should note that SuperMedia has lost 60% over the past 52 weeks, has a P/E of 0.43, EPS of $5.77, book value $2.19, quarterly revenue growth (yoy) of 70.40% and pays no dividend. On Wednesday, SuperMedia reported that 3Q2011 advertising sales fell 15.9% verses a 3Q2010 decline of 15.4% while adjusted earnings (before interest, taxes, depreciation and amortization) or EBITDA declined 8.7% to $157 million. SuperMedia’s CEO stated that he was disappointed in the top line results but he was pleased with the company’s continuing efforts in attacking its cost structure.

Yellow Media (TSE: YLO)

Yellow Media is a media and marketing solutions company that owns and operates Canada’s properties and publications, including Yellow Pages directories, Canpages directories, YellowPages.ca, Canada411.ca and RedFlagDeals.com. On Thursday, Yellow Media rose 27.54% to C$$0.44 (YLO has a 52 week trading range of C$0.12 to C$6.46 a share) for a market cap of C$227 million. Investors should be aware that Yellow Media has declined 93% over the past 52 weeks, has a beta of 1.93, P/E of 2.48 and EPS of $0.18. On Thursday, Yellow Media posted a 14% rise in third-quarter profit after adjusting for an impairment charge and reported a net loss from continuing operations of C$2.8 billion. However, Yellow Media’s online revenue also rose 26% and accounted for more than 27% of total revenue verses 20% a year ago - sign that the company’s digital push was gaining ground.

The Bottom Line. While directory and yellow pages stocks Dex One Corporation, SuperMedia and Yellow Media may have all had their day on Thursday but these stocks are also way down over the past year.