Miller Value Partners, an investment management company, released its “Deep Value Select Strategy” fourth-quarter 2023 investor letter. A copy of the same can be downloaded here. In the fourth quarter, Strategy returned +1.67% net-of-fees trailing the S&P 1500 Value Index’s +13.70% return. For the full year, the strategy returned +9.86% behind the S&P 1500 Value Index’s +21.64% due to weaker Q4 performance. Due to a weaker September and October, the strategy’s smaller cap assets suffered a large contraction in valuation, which contributed to the underperformance in the quarter. December witnessed a good comeback for the strategy. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Miller Value Deep Value Select Strategy featured stocks such as Gannett Co., Inc. (NYSE:GCI) in the fourth quarter 2023 investor letter. Headquartered in McLean, Virginia, Gannett Co., Inc. (NYSE:GCI) is a media and marketing solutions company. On January 22, 2024, Gannett Co., Inc. (NYSE:GCI) stock closed at $2.3800 per share. One-month return of Gannett Co., Inc. (NYSE:GCI) was -4.03%, and its shares gained 12.80% of their value over the last 52 weeks. Gannett Co., Inc. (NYSE:GCI) has a market capitalization of $354.325 million.
Miller Value Deep Value Select Strategy stated the following regarding Gannett Co., Inc. (NYSE:GCI) in its fourth quarter 2023 investor letter:
“Nabors (NBR) and Gannett Co., Inc. (NYSE:GCI) were the two largest detractors during the quarter. Gannett shares also pulled back during the quarter. Management’s transformation plan remains on track in my view. Their digital offerings and new content partnerships are growing nicely, as they approach 50% of revenue, which may lead to an eventual inflection to positive company revenue growth. The company has an opportunity to monetize their 180M+ monthly unique visitors, developing new subscription revenue and cash flow streams over time. The New York Times, which has a smaller audience reach than Gannett, undertook a similar successful transformation 10 years ago that lead to accelerating revenue growth and free cash flow generation. As their transformation progressed over that period, The New York Times valuation expanded, price-to-sales multiple increased from less than .5x to 3.2x and Enterprise Value to EBITDA from near 7x to 21x.
Gannett’s share price today presents a similar long-term opportunity as it implies no value from a successful transformation. Gannett’s valuation multiples are near all-time lows, price to sales multiple of .13x and an EV/EBITDA near 5x. Ongoing operational progress and debt reduction has the potential to accelerate free cash flow generation and unlock significant equity value overtime. In addition, Gannett’s anti-trust lawsuit against Google is underappreciated in my view as it has the potential to further accelerate the transformation. Winning the case could result in a reward in excess of $1B (anti-trust suits awards can be triple damages). Gannett remains one of our larger holdings, with significant embedded long-term appreciation potential with business value significantly above current share prices.”
A close-up shot of an engineer configuring an email marketing system.
Gannett Co., Inc. (NYSE:GCI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 18 hedge fund portfolios held Gannett Co., Inc. (NYSE:GCI) at the end of third quarter which was 19 in the previous quarter.
We discussed Gannett Co., Inc. (NYSE:GCI) in another article and shared the list of dividend aristocrats that slashed their dividends. In addition, please check out our hedge fund investor letters Q4 2023 page for more investor letters from hedge funds and other leading investors.
Suggested Articles:
- 15 Richest Muslim Countries in the World
- 25 US Cities with the Highest Homeless Population Per Capita
- 15 Best Places in Washington State for a Couple To Live on Only Social Security
Disclosure: None. This article is originally published at Insider Monkey.
