The Seven West Media Ltd (ASX: SWM) share price closed 6.19% higher yesterday as the company completed the sale of its 50% stake in Yahoo7 to Verizon Media.
What did Seven West Media announce?
Seven announced that it will receive $20.75 million in cash for its shares in this financial year, and the media company now owns and operates all of its 'direct to consumer' digital products.
The sale comes after Seven exercised a put option under the Yahoo7 Shareholders Agreement, which management said is pivoting the company to meet advertisers' demand for "holistic, integrated, cross-screen media solutions".
CEO Tim Worner was bullish on the news, with Seven now regaining 100% control of its brand and assets online as he said "this strategy is already working on all fronts".
The company achieved its largest ever unique monthly audience of five million in February, following year-on-year (YoY) growth of nearly 20%.
The company recently launched 7NEWS.com.au which Worner said is already reaching larger daily online news audiences than when it was inside Yahoo7.
Should you buy Seven West Media shares?
Prior to yesterday's announcement, Seven West shares had fallen 5.8% for the year but closed the day at $0.52 per share, marginally lower than the $0.53 per share valuation it had at the start of the year.
There's no doubt conditions in the Australian media landscape are difficult, which was evidenced in the recent merger between Nine Entertainment Co. Holdings Ltd (ASX: NEC) and Fairfax Media.
Seven does appear to be cheap relative to its S&P/ASX200 Index (ASX: XJO) peers as it trades at just 5.8x earnings.
However, Seven has seen its share price slide from over $7 per share in 2010 and nearly $1 per share as recently as September 2018.
I think a better option within the Aussie media space could be Southern Cross Media Group Ltd (ASX: SXL) which has climbed 17.8% higher so far this year and still offers a handy 6.8% dividend yield.
For those looking for a more high-risk, high-reward play, this top-rated stock in a booming $22 billion industry could have a spot in your growth portfolio.
