These Top Investors Foresaw Journal Media Group’s Shares Surging Way Back In Q2

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Newspapers aren’t going to go away. Warren Buffett, the best investor of all time, has bought tens of newspapers in recent years for hundreds of millions of dollars. Here’s what Buffett had to say about why he acquires papers:

“Newspapers continue to reign supreme, however, in the delivery of local news. If you want to know what’s going on in your town – whether the news is about the mayor or taxes or high school football – there is no substitute for a local newspaper that is doing its job. A reader’s eyes may glaze over after they take in a couple of paragraphs about Canadian tariffs or political developments in Pakistan; a story about the reader himself or his neighbors will be read to the end. Wherever there is a pervasive sense of community, a paper that serves the special informational needs of that community will remain indispensable to a significant portion of its residents.”

By acquiring 17 dailies and 18 weeklies, Gannett Co is executing Buffett’s newspaper strategy for a modest price of 4.66 annual adjusted EBITDA. If management succeeds in realizing $25-to-35 million in synergies, the deal will be a home-run. At an 8.39 forward P/E and with a dividend yield of 5.35%, Gannett Co seems like a good buy.

Disclosure: None

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