Two New Companies Make the List

Two new companies have entered the Magic Formula top 25 this week, but they both seem to be weak contenders to me:

1. Nathan's Famous (NATH) - Famous for the hotdog-eating contest held every year on Long Island, this doesn't look like the most compelling investment on the magic formula list, with its 12% earnings yield. If you take out one-time items from selling property last year, earnings are up, at least. The current focus seems to be on licensing and franchise fees. Last week's earnings report dropped the stock about $1.50 a share, down to $13.05.
   
   
2. New Frontier Media Inc (NOOF) is the other new entry. It's an adult entertainment company, that distributes its product via pay-per-view, hotels, cable, video on demand, and wireless. It's announced a "major victory over Playboy (PLA)". It has an earnings yield of 11%, and the management doesn't seem to be the most honest.