Hedge Funds Like What They See From Gray Television As It Strikes Major Deal

Gray Television, Inc. (NYSE:GTN) managed to advance as much as 57% earlier this year before crashing back to the start-of-the-year level amid the recent market selloff. Yesterday’s closing price of $11.74 gave the stock a market cap of $796 million and a trailing Price to Earnings (P/E) ratio of 11.xx, a bit higher than the industry average of 8.00. Analysts have set a forward P/E ratio of 7.25 for the 2016 fiscal year, eyeing significant growth in terms of net sales and earnings per share (EPS). Net sales are expected to reach $709 million, while EPS is estimated to grow to $1.62, triple the estimate for the current year. Gray has been on a spending spree since late 2013, eyeing mainly small, local TV stations and managing to agree to deals for more than two dozen stations, and is set to continue looking for potential deals, albeit at a smaller pace.

“Through the Schurz transaction, we will significantly expand the quality of our portfolio of leading television stations. We welcome more dedicated reporters, account executives, and technologists to our growing family. Quite simply, Gray’s existing stations will make the Schurz stations stronger, while the Schurz stations will make our existing stations better,” commented Hilton H. Howell, Gray’s President and Chief Executive Officer.

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