Like a number of very successful companies, Knoxville-based Scripps Networks Interactive Inc. is sitting on a big pile of cash. We’re talking several hundred million dollars.
Having a lot of cash can be comforting in an uncertain economy, but is it really a good idea? It used to be “considered bad form, even indicative of poor management” to have too much cash, Daniel Carver writes in a piece for the website Seeking Alpha.
Carver looks at the cash holdings of five companies — Scripps, Google, Tiffany, Analog Devices and Xilinx. His comments about Scripps Networks are less than enthusiastic.
About Scripps Networks, Carver writes: “There is nothing in recent headlines to suggest any reason for SNI to be parked on so much cash. In fact, the earnings outlook is bright. Dare I suggest this CCE surplus represents nothing more than a blatant example of fiduciary irresponsibility?”
Carver’s analysis : 5 Scared, Clueless Companies Sitting on Mountains of Cash
Disclosure: I hold a small number of SNI shares.