Barron's Insight: Dressing Up Playboy Stock
Sex sells. But that hasn't been enough to lift Playboy Enterprises from its slump.</br></br>Shares of the company, which publishes Playboy magazine and operates the soft-core Playboy TV channel and hard-core Spice channel, have been lackluster over the past decade. In fact, the stock, near $10, is below its price when Hugh Hefner, the company's founder and controlling shareholder, took the company public in 1971.</br></br>Now, some people are seeing reason for improvement.</br></br>Playboy (PLA: Class B shares) has been hurt recently by the losses at its magazine and rising competitive pressures in the domestic TV business.</br></br>The company warned in May that its 2006 profits would be way below Wall Street's expectations. That news sent the stock skidding. Earnings are likely to drop to 25 cents a share, from 56 cents a share in 2005.