Even without a deal in the near term, Time has very strong cash flow that will probably provide support, particularly in an environment when many investors have shunned high-growth companies that generate little earnings. Based on Time Inc.'s indicative trading range in the gray market, the stock will have a free-cash-flow yield of more than 10 percent, based on Morgan Stanley's estimates.
And investors should probably give Time Inc. a chance manage the business better as an independent entity. As a very small part of Time Warner, accounting for less than 10 percent of operating profit, it was probably a distraction but not worth the full attention of management from the parent company.
What's more, Time titles probably have strong brand value that can translate to digital revenue over time. Sports Illustrated's SI.com, for instance, drew 19.2 million unique visitors in April, up from 15.5 million a year earlier, according to comScore.
Read MoreMaking Discovery's stock fun to watch again
Time Warner also has a respectable track record when it comes to past spinoffs. Since Time Warner Cable was separated in March 2009, investors who kept those shares have seen an incredible 507 percent total return, including dividends, according to FactSet. Over the same period, Time Warner Inc. has returned 361 percent.
Even AOL Inc., which was considered doomed by many, has generated a 78 percent total return since its spinoff in December 2009. Over that time, Time Warner has risen 169 percent.
Granted, Time Inc. arguably has greater challenges than other publicly traded print companies. News Corp., for instance, probably owes some of its success to valuable television assets in Australia while Meredith also owns lucrative TV stations.
But Time Inc. is looking downright cheap based on the latest gray market price of $23. That's equivalent to an enterprise value, adjusted for net debt, of about 6.7 times last year's earnings before interest, taxes, depreciation and amortization. Meredith, meanwhile, trades at nearly 10 times ebitda. At that price, bets against Time are a risky gamble.
Read MoreNetflix investors may find HBO results unwatchable
—By CNBC's John Jannarone