As Gannett's
stock sinks lower, trade publication
Editor & Publisher today quotes a
Morningstar investor report's negative outlook on GCI. "Gannett's shares are overvalued, in our view," analysts
Joscelyn MacKay and
Kimberly Picciola write in their latest note to investors,
according to E&P's Fitz & Jen business blog.
The analysts' note continues: "Gannett cut a number of costs in an attempt to rightsize the business, but we are not confident that the company will be able to keep pace with the decline in revenue over the longer term. In addition, we are concerned that Gannett will run out of fat to trim and have to cut into muscle, negatively impacting the quality of its product."
Gannett shares closed today at $13.36, down 10 cents, or nearly 1%, after trading as low as $12.54 earlier in the day. Newspaper stocks overall were battered as the broader market sank on growing fears that already-fragile U.S. economic growth is running out of gas.
Invvestors are now focused on tomorrow's crucial monthly U.S. Labor Department employment report, which will include the latest figures on private-sector hiring.
From the report: . ...We are concerned that Gannett will run out of fat to trim and have to cut into muscle, negatively impacting the quality of its product."
ReplyDeleteUm. ... been there, doing that.
Hooray, at last some stock analyst has been saying what we have been saying on this blog for months now. You just cannot keep on cutting without hurting the company's long-term viability. Corporate doesn't give a fig what we say here, but it certainly cares a lot about what sterling stock analyst firms like Morningstar think of their strategy.
ReplyDeleteI've got news for the analyst....A lot of the muscle has been trimmed and a lot of fat remains.
ReplyDeleteExactly right. But how seriously can we take Morningstar if they don't realize that Gannett has already seriously cut the quality of its products? Doesn't seem like they do a helluva a lot of research. I would be surprised if they could find 10 Gannett papers that are better today than they were five years ago.
ReplyDeleteIt's times like these that Gannett could use a Bruce Sherman of Private Capital Management to weigh in.
ReplyDeleteGannett needs to layoff all the corporate employees ex-finance and borad types who prepare reports and let all local business units run their own show. They can then rent the space of half of their HQ to someone. Don't touch USAT as it is its own unit.
ReplyDelete"The only thing you get when you cut a turd is more pieces of turd."
HEY GRACIA...no one ever CUT their way to GROWTH. How about you start investing and maybe you will see some growth.
ReplyDeleteGannett has very little room and the are running out of bullets. 60% of their costs are fixed costs, so laying off more people (except corporate types, ) will not help them grow.