Gannett was trading below US$10 before it closes at US$10.29 on Friday 4 Dec 2009. Yesternday, 10 Dec 2009, Gannett closes at the price of US$12.84. That's a 24.8% gain in a week. What has caused this gain?
The reason: "Gannett provided investor update at UBS conference; comfortable with high end of current Q4 EPS estimates Co reported on business strategy and presented outlook for 2010."
"Co is clearly comfortable with the high end of current Q4 2009 EPS estimates which range from $0.48-0.62." (vs $0.52 First Call consensus)
This is the reason to bring Gannett to last night price. Some people may regret that they have missed the boat to buy the stock at US$10. However, there is no reason for one to regret if homework is done.
For the first nine months of 2009, Gannett has a total EPS of US$1.15. If we take into account the above announcement, then Gannett's EPS for this year will be in the range of US$1.63 to US$1.77.
The average P/E ratio of the Gannett for the past 10 years was 16.8. Multiplying this P/E, the share price of Gannett should be around US$27.38 to $29.74. (This is just a rough estimate using the fundamentals. Fundamentals can only estimate the price but cannot control investors' fear or greed. The decision to buy or sell the stock still lies with the individual investor.)
The growth rate for Gannett's EPS from 1999 to 2006 was 6% compounded for the 7 years. The growth rate for Gannett's Equity was 12% compounded for the 7 years. (2007 and 2008 was excluded because of the crisis.)
To buy or not to buy? The decision is yours.
About Gannett: Gannett Co., Inc. is an international news and information company. In the United States, the Company publishes 85 daily newspapers, including USA TODAY, and nearly 850 non-daily publications. Along with each of its daily newspapers, the Company operates Websites offering news, information and advertising that is customized for the market served and integrated with its publishing operations. Newspaper publishing operations in the United Kingdom, operating as Newsquest, include 17 paid-for daily newspapers, almost 200 non-daily publications, locally integrated Websites and classified business Websites with national reach. The company has three principal business segments: publishing, digital and broadcasting.
More infomation on Gannett can be found in http://www.msn.com/ or http://www.gannett.com/