But shares in two other companies are soaring anew on Wall Street's enthusiasm for their roles in the new digital economies. Recent trading prices for:
- GCI: $12.97, down 8% for the day, and nearly 2% from a year ago
- Apple: $310.08, up 2.6% for the day, and 63% from a year ago
- Google: $599.22, up 11% for the day, and 13% from a year ago; GOOG reported better-than-expected third-quarter financial results yesterday
The key to why is easily found: print advertising revenue — down 5.1 percent in the last quarter. Google and Apple are both expanding rapidly. Gannett is contracting.
ReplyDeleteI can't help but think that both Google and Apple are overpriced. Is there a split somewhere over the horizon?
ReplyDeleteAs for Gannett, forget about it and move on. I would hope that no rank and file employee is filling his or her 401k with GCI. Unless you have a long, long way to go to retirement, Gannett does not belong in your portfolio.
A stock split wouldn't change the value of either companies' shares; it would simply reapportion it across more shares. For example: under a two-for-one stock split, one Google share now worth $600 would become two shares worth $300 each.
ReplyDeleteIt's a little unfair to compare Apple and Google to Gannett.
ReplyDeleteTwo have smart, bordering on brilliant, leadership and have products the public can't live without. The third has confused, bordering on incompetent, leadership that has a product they don't know what to do with.
Two have a strategy clearly built on the future. One is stuck in the past and can't spell future.
GCI's revenues were essentially flat from a year ago at $1.31 billion. What that means is Gannett has made its profit targets by cutting expenses or laying off and furloughing employees. Of course, anyone reading this blog knew that since it seems to be the central topic discussed each week.
ReplyDeleteWall Street was expecting an increase in revenues to at least $1.33 billion.
So the message is clear to corporate: All this cutting and slashing is producing a smaller company with less revenues. That in turn is affecting your stock options by cutting the stock price, and so cutting your retirement income. Do you really want to continue down this path?
I'm no financial guy so I'd like to know...
ReplyDelete1. Does the quarterly report give any indication as to whether Gannett is investing more money in its print products than it was a year ago?
2. Does the report show if digital is getting more corporate dollars these days than it did a year ago?
3. What will be Gannett's reasonable financial options moving forward if the economy doesn't improve over the next year or two? From what I hear, the economy is expected to pretty much stagnate through 2012.
4. Will Gannett lower maqnagement compensation at the corporate and local levels while also reducing the ranks of management whose function is largely administrative? That might be a good place to cut.
Thanks for your attention.
USA TODAY circulation down 1.7% in Q3 according to GM.
ReplyDelete$7MM in severance, mostly to USA TODAY, according to GM.
Newprint prices will be up in Q4, according to GM. She reports that newsprint expense will not increase materially. That would suggest that if newsprint prices rise, the news hole will shrink accordingly.
There's a Wall Street aphorism for every situation, and the one that applies to today's sell-off (-9.9 percent at this moment) on good news goes like this: Buy the rumor, sell the news. Traders are using GCI like a cheap you know what. McClatchy also down at this moment -6.0 percent and Lee Enterprises down -9.7 percent. The street is utterly unconvinced that newspaper companies can and will convert to a profitable digital future.
ReplyDeleteIn my opinion, a buying opportunity. And no need to believe in a bright future for GCI, either. Buy GCI at +/- $12 today, sell in two months at +/- $15 after it recovers. And make no mistake, it will recover. The market corrects all price inefficiencies, and GCI at ~$12 is an inefficiency. You'd like a 25 percent gain on your money in a couple months, which annualizes to ~100 percent, right?
25% gain in a couple of months? what would drive those kinds of gains? bargain hunters? No. Takeover specialists? No. Growth prospects? No? Nothing will drive this stock higher short term, of anything substanstial. a far better strategy would be to short the stock. it will drop again in tandem with other media companies that are going to report 3rd quarter results in the coming weeks.
ReplyDelete