Gannett Stock

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Re: Gannett Stock

Unread postby tcdude » Mon Nov 02, 2009 12:47 am

Gannett doesn't need good news to go up from here over the next year. It just needs a lack of bad news. That's quite a significant difference. Good news is welcome, of course, but not necessary. The success of the $500M bond offering was quite indicative there. Earlier in the year they couldn't move a lot less than that at even higher rates. This time within 24 hours of announcing a $400M offering they upped it another $100M. Do you know why that happens? It happens because the underwriters come back and say "Hey, we've got more institutional customers for your offering than we can handle if you want to raise it some more". Yes, that's right, the big institutions were clamoring for an expanded Gannett debt offering.

Since the beginning of the year, they've lowered the overall debt of the company by $276M, restructured another $750M or so several years further out than previously, and did so without worsening any of their tripwire ratios that could cause a debt call. This company is in massively better shape financially than most newspaper companies, and much better shape than it was in January. Another 18 months like the last six and there will be no trouble at all in rolling over the 2011 debt.

I wouldn't dream of trying to tell you what it will look like in five years --but for the next year to eighteen months it is going to look pretty solid, and that will be reflected in its stock price. The stock price in March was discounted for a possible bankruptcy by July. And now, even after the recent correction, it is up 400% from its lows as near-term bankruptcy is clearly off the table. . . and STILL undervalued by conservative historical metrics by another 100% raise or so from here. . .without "good news". All it will take to get that 100% increase is a lack of further bad news and a relatively stable market around it to appreciate it is there.

More layoffs? Oh yeah, they are coming. Some will be further consolidation of tasks to regional operations (I talked about a smallish one in Broadcast on another thread). That's nothing new --it's been happening for at least the last two years. Also, nothing like a near-death experience to focus the mind --any entity that doesn't have a clearly visible path to profitability in the next two years is probably a goner.

At the moment I own 100 shares, to make it easy for me to keep an eye on it --at one time this summer I owned 10k shares. I figure I'm up more on Gannett this year than the family member in this house will make in wages from them this year.
tcdude
 
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Re: Gannett Stock

Unread postby here » Mon Nov 02, 2009 4:11 am

tcdude wrote:Gannett doesn't need good news to go up from here over the next year. It just needs a lack of bad news. That's quite a significant difference.

As significant as the difference between innocent and not guilty? Lack of bad news does not equal good news.
here
 

Re: Gannett Stock

Unread postby tcdude » Mon Nov 02, 2009 11:42 am

here wrote:
tcdude wrote:Gannett doesn't need good news to go up from here over the next year. It just needs a lack of bad news. That's quite a significant difference.

As significant as the difference between innocent and not guilty? Lack of bad news does not equal good news.

Just need to stay on the path they've been on for the last three quarters to achieve that -- average $.40/share profit (i.e. ~$1.60/year) and steady chipping away at the principal and restructuring of the expirations on the debt.

That'll become more apparent after 4Q 2009 results are announced in the first quarter, as that is when that massive 4Q 2008 asset writedown will no longer be impacting trailing year results on most of the quote sites that show yearly EPS and PE ratios --my broker's analysis page for GCI shows EPS (earnings per share) as a loss of -$19.47/share for the previous four quarters. A lot of investors would look no further than that (which is not unreasonable!) and miss that the last three quarters are actually profitable. As I said, that "bad press" goes away on quote/analysis sites after the next earnings announcement.
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Re: Gannett Stock

Unread postby tcdude » Mon Nov 16, 2009 2:32 pm

Just an fyi --I noticed a SEC 13-G filing last week that shows that Ariel (Gannett's biggest stock owner) cut their holdings from 12.5% to 7.4%. Since they purchased most of that in March/April for less than $3/share (when they went from less than 5% ownership to 12.5%), I don't find that too indicative of anything other than profit-taking. They still own 17M shares. But now they are "playing with the house's money" (they own ~5M more shares in Gannett today than they did in February, while having cashed out a ~$100M profit at the same time) . They sold roughly 11M shares, which certainly could have been a significant contributor to the mid-October correction in GCI.

Interestingly, the filing was on the same day that a blog appeared talking about what the blogger thought Ariel saw in Gannett: http://www.gurufocus.com/news.php?id=75211

While the blogger's analysis is not a perfect match for my own (he puts more emphasis on digital growth than I do), it does share some thoughts and arrives at roughly the same conclusion --$21/share next year (I've been saying $20/share is my target for next summer).
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Re: Gannett Stock

Unread postby doubletruck » Thu Nov 19, 2009 10:41 pm

Get ready, tcdude. GCI will slide below $10/share in a soft stock market and some layoffs news coming from HQ soon. Then I expect a run up early in the New Year. Almost time to get back in and make a quick profit.
doubletruck
 

Re: Gannett Stock

Unread postby Guest » Fri Nov 20, 2009 4:17 pm

Doubletruck, can you please share more info about those layoff rumors? Company-wide? 1st quarter?
Guest
 

Re: Gannett Stock

Unread postby tcdude » Mon Nov 30, 2009 7:37 pm

http://www.latimes.com/business/la-fi-c ... 1138.story

Perhaps Broadcast might manage a little upside surprise for 4Q after all.

"Even local TV stations -- among the hardest hit by the slump in advertising spending -- have received a lift, primarily fueled by stores that unleashed their holiday sales campaigns earlier in the season, according to television executives. "

I have a small position going from the last time it was under $10, and added to it a little bit today.
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Re: Gannett Stock

Unread postby doubletruck » Mon Nov 30, 2009 9:43 pm

I was just thinking of you, tcdude, but I see you beat me here. Yes, GCI went below $10/share today and I think it may dip closer to $9. There is a malaise in the market right now and GCI is not exempt from it. But the upcoming layoff announcement should make the stock pop again. I've been talking about how good the broadcast revenue will be in the 4th quarter and now I saw the article you posted today, with some 'experts' now agreeing with me. The Portland and Bangor Maine stations in particular reaped mucho ad revenue from the gay marriage election question.
doubletruck
 

Re: Gannett Stock

Unread postby sad » Tue Dec 01, 2009 1:13 pm

How sad - The stock needs more layoffs fo a jump. SAD more layoffs during the holidays

Typical Gannett- layoffs between Thanksgiving and New Years.
sad
 

Re: Gannett Stock

Unread postby tcdude » Tue Dec 01, 2009 2:25 pm

May not be layoffs, may be announcements of 1Q furloughs instead. See new thread in layoffs section of forum. Announcement expected today.

Tho, of course, it could be both.
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Re: Gannett Stock

Unread postby doubletruck » Tue Dec 01, 2009 8:02 pm

The USA Today layoffs announced today are just the start. The east coast papers are not a good place to be right now, unfortunately.
doubletruck
 

Re: Gannett Stock

Unread postby tcdude » Fri Dec 04, 2009 1:23 pm

Be interesting to see what news, if any, comes out of the UBS presentation next week. That's the kind of forum where an exec team likes to share some good news if they have any in their pockets.
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Re: Gannett Stock

Unread postby tcdude » Mon Dec 07, 2009 4:22 pm

Nice 7.8% move up by GCI today in a nearly flat overall market. Closed at the highs too and a relatively smooth upward curve all day. I suspect a "buy on the rumor/sell on the news" speculation for Wednesday's analyst meeting.
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Re: Gannett Stock

Unread postby tcdude » Tue Dec 08, 2009 7:17 pm

Another 6.4% up today, for about 18% up over the last three sessions. Seems the UBS conference is driving this move, as McClatchy gave some "better than expected" news today at the conference and was rewarded for it, pulling the rest of the sector along.

I expect GCI to make a significant move tomorrow. . . just not willing to predict in which direction. :) Clearly a significant amount of "good news" (or at least "less bad news than expected") has been priced in the last three sessions. That would argue for a sell-off tomorrow unless the exec team has something pretty nice to say/show to exceed the expectations priced in the last three sessions --in other words, classic "buy the rumor; sell the news".
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Re: Gannett Stock

Unread postby tcdude » Wed Dec 09, 2009 1:09 pm

http://money.cnn.com/news/newsfeeds/art ... RTUNE5.htm

Article about Gannett's presentation at UBS conference.

Gannett's own PR, with various metrics for 2010: http://www.businesswire.com/portal/site ... 8&vnsId=33

"For the year, Martore said she expects the company to post revenue of $5.6 billion, down 18% from 2008.

She said the company is "clearly comfortable with the high-end" of current fourth-quarter earnings estimates, which range from 48 cents a share to 62 cents a share."


Mean quarterly estimates are running at $.54. Gracia would seem to be suggesting $.58-.62 is where they will hit. That would be another solid performance and keep GCI on track for a ~$20 range sometime next spring/summer, unless the wheels fall off the general economy in a "double dip".

1Q is a seasonally weak quarter, tho the Olympics will help that on the broadcast side. . . and clearly the announced 1Q furloughs were intended to help there as well.
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Re: Gannett Stock

Unread postby tcdude » Mon Jan 04, 2010 5:20 pm

Feeling pretty good about having significantly re-invested the last time GCI dipped to $10. I own about 1/2 as many shares as I did this summer, but a 50%+ gain the last few weeks still has me humming happy tunes.

A leading media analyst at Wells Fargo also seems pointed to a $20+ target for GCI in 2010: http://money.cnn.com/news/newsfeeds/art ... 151675.htm

At $1.95 eps for the year, $20/share would be just a nose above a PE ratio of 10. . . the overall S&P 500 is trading at about 21x earnings right now.

I still wouldn't "fight the market" re GCI if the overall market went into a tailspin, but assuming a relatively stable (even sideways rather than up) market, I see very little in the way of GCI continuing to rise thru the 4Q earnings report.

That is where it will get interesting. Gracia claimed to be comfortable with a $.62/share ("high end" at that time) 4Q report. . .but now Janedis has raised the bar to $.69. So if they can't at least hit that mark there is liable to be profit-taking. Then we get into the whole phenomenon of "whisper" numbers. . . so we'll have to see how the stock does between now and then as whether even $.69/share is enough to hold the price at that point. At todays price, probably. If there is significant appreciation between then and now. . .maybe not.

I'm not changing my call for $20 by late spring/early summer. . .but I would no longer be surprised if it beat that timing somewhat if the overall market stays stable-to-up. Either temporarily just before the 4Q earnings announcement based on speculation of an upside surprise (and then falling back if it doesn't happen). . . or more permenantly if a significant beat of Janedis $.69/share for 4Q happens when GCI announces earnings.

Note there is already a greater than 50% discount of GCI vs the S&P 500 on PE ratio. Arguably there is a fantasy number of $40+/share that could be possible. But it won't happen until --actually, unless-- GCI can prove again it can grow revenue year-over-year, and not just against the three "Great Recession" quarters of 2008 4Q, and 2009 1Q and 2Q. So in other words, don't be betting on $40 share as even an "optimistic" (rather than fantasy) possibility before 2011. . . and only then if revenues beat year-over-year in the second half of 2010 and 1Q 2011. . . which would also likely be when (i.e. second 1/2 of 2010 or early 2011) the dividend would start growing again if those y-over-y revenue beats happen.
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Re: Gannett Stock

Unread postby doubletruck » Sun Jan 31, 2010 4:58 pm

GCI quarterly earnings report is not going to be good when it is announced tomorrow morning. I'm looking for a significant move down. Let's see if I'm right.
doubletruck
 

Re: Gannett Stock

Unread postby tcdude » Mon Feb 01, 2010 2:35 pm

I was expecting a "sell on the news" move down anyway, so I can't say I'm shocked. Treated the bottom this morning as a buying opportunity.

I can't call that report "not good" tho, when they beat even the "high" analyst expectations by 3 cents/share, and "consensus" by 9 cents/share. And beat consensus on revenue too, which is arguably more important, and predicted Broadcast up year over year by high single digits for 1Q.
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Re: Gannett Stock

Unread postby tcdude » Mon Feb 01, 2010 6:31 pm

Just listened to the call from this morning. . . interesting that Dubow said in announcing Gracia's new role as President and COO that he would "continue to work on M&A" along with other strategic issues.

Now, it could be he was just making clear the deliniation of responsibilities since "President and COO" is a new (high salary, alas) job at Gannett and he wanted the analysts to know who was responsible for what.

Or maybe he had more in mind there by mentioning it. One of the things you might do if you were anticipating being bought is setup Dubow to ride off into the sunset, while putting a new (lower paid) exec in charge for the longer-term post-merger entity as somebody's else's division.
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Re: Gannett Stock

Unread postby 12 punch » Mon Feb 01, 2010 11:01 pm

Word on the street is Gannett is prime to be taken over either in whole or part. Any thoughts ?
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