Why I think Britain’s Warren Buffett is right to be bullish about this stock

Will this news giant withstand the next generation of online news readers?

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The UK news market has changed significantly over recent years, with many national newspapers finding their readership increasingly migrating to online access.

Despite this growing trend for web-based news access, The Daily Mail and General Trust (LSE: DMGT) has managed to maintain a healthy market cap of $2.82 billion. With investment advocates including Nick Train vocal about the potential of the firm, can DMGT maintain its stability in the face of a decline in paper popularity?

Longevity indicates security

With most organisations, the very fact of achieving decades of solid trading usually indicates that the brand has the ability to weather evolving trends and changing consumer appetites. Established in 1922, DMGT has certainly proven the ability to adapt and transform according to consumer appetite and demand.

The Daily Mail has successfully navigated the potential pitfalls of migrating to an online environment, leaving many of its competitors behind in terms of level of popularity among readers. Unlike many others such as The Guardian, The Daily Mail has not yet been required to request additional funding from its readership in order to compensate for dwindling paper purchases.

This indicates a strong recognition of the preferences of its consumers, in terms of the ability to perceive fluctuating trends and evolve proactively to meet evolving demand. Through extensive advertising and a fast-moving turnover of articles, coupled with celebrity figures contributing to articles and opinion pieces, The Daily Mail has effectively maintained a string revenue stream despite the reduction in physical sales of the paper.

A strong global market player

Significantly, the firm also benefits from a significant presence globally, through its subsidiary DMG World Events and DMG Information, which affords additional financial security should UK appetites change and consumer habits impact revenue. The firm has a broad product base, operating in data analytics, information and entertainment.

This offers a diverse reach that enables DMGT to accommodate a broad readership and strengthen its overall foothold in the market. This is crucial for future growth, as more and more UK news readers migrate to a paperless environment and adjust their appetites to access information digitally.

As a result, DMGT looks like a strong prospect for future investment, meriting the faith that key investment figures such as Nick Train have placed in the firm. Through an insightful evolution, DMGT appears ideally placed to prosper into the next decade as a long-term stable investment.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Jen has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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