A Quick Read On Gannett

Let's Look Up Close At Gannett
Newspaper companies are struggling these days for obvious reasons. First and foremost, in this sluggish economy advertisers aren't spending a great deal of money, which is a negative. Second, consumers are increasingly garnering their news from online sources. As a result and perhaps not surprisingly, the shares of several big-name newspapers are trading near their 52-week lows. In the doghouse is The New York Times (NYSE:NYT), McClatchy (NYSE:MNI) (known for the Miami Herald) and, of course, Gannett (NYSE:GCI) (USA Today).

Honing in on Gannett, it recently announced a big dividend cut and also released an uninspiring fourth-quarter earnings report. Total net operating revenue in the period ended December 28 declined 8.5% from last year to $1.74 billion.

Trading Under Book Value
To be clear, I'm not ready to declare Gannett dead on arrival. A few items in the public domain draw my attention. The price-to-book of 0.54 is interesting. My initial hope after seeing this is that the downside from here could be somewhat limited. However, companies that trade under book value sometimes continue to do so due to the lack of a catalyst or other reasons.

Another thing that garners my attention is that the company is expected to earn $1.72 a share this year, according to data on Yahoo Finance. I find that unlikely, but even if it generates a more modest profit than the estimate, it could be intriguing since the stock trades under $3.

Finally, a 4-cent dividend is payable in early April. Once it's paid out (assuming that it is), the forward yield could be better than 6%.

Bottom Line
Bargain hunting isn't easy. It involves a lot of work. As far as Gannett is concerned, I won't be buying the stock right now. However, it has some things worth noting.

Be sure to read Digging Into Book Value to learn more about this calculation of shareholder value.