Miller Value Partners, an investment management firm, published its “Deep Value Strategy” first quarter 2022 investor letter – a copy of which can be downloaded here. After a challenging back half of 2021, where the portfolio experienced significant valuation compression, the Deep Value Strategy bounced back and has had a strong start to the year. For the quarter, the Deep Value Strategy was up more than 30%, significantly ahead of the S&P 1500 Value Index and the overall market. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Miller Value Partners Deep Value Strategy mentioned Gannett Co., Inc. (NASDAQ:GCI) and explained its insights for the company. Founded in 1906, Gannett Co., Inc. (NASDAQ:GCI) is a McLean, Virginia-based mass media holding company with a $579.0 million market capitalization. Gannett Co., Inc. (NASDAQ:GCI) delivered a -25.89% return since the beginning of the year, while its 12-month returns are down by -24.18%. The stock closed at $3.95 per share on May 13, 2022.
Here is what Miller Value Partners Deep Value Strategy has to say about Gannett Co., Inc. (NASDAQ:GCI) in its Q1 2022 investor letter:
“One of our largest holdings was also one our largest detractors during the quarter as Gannett (NASDAQ:GCI) was down more than 14%. The company was adversely impacted in Q4 by weaker advertising revenue, inflationary pressures in their newspaper operations, and headwinds from the resurgence of Covid. We continue to believe the company’s multi-year transformation plan to transition from an analog to digital media company has an opportunity to unlock significant equity value. We see limited value in the share price for the company’s Business-to-Business digital marketing services (DMS) platform and Business-to-Consumer platform, which should generate high margin, recurring subscription revenue. In addition, Gannett’s sports medium, national events business, and sports betting operation are underappreciated assets. With a price-to-sales now less than .2x, the marketplace appears to be overlooking Gannet’s significant asset base and future cash flow potential. Management is expecting free cash flow to grow at a 40% Compound Annual Growth Rate (CAGR) through 2025 and recently announced a new share buyback program which at current market prices has the ability reduce the share count by more than 15%. We continue to believe that success of the transformation plan will lead to long-term upside potential in Gannett’s share price, multiples of the current price level.”
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Our calculations show that Gannett Co., Inc. (NASDAQ:GCI) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Gannett Co., Inc. (NASDAQ:GCI) was in 14 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 18 funds in the previous quarter. Gannett Co., Inc. (NASDAQ:GCI) delivered a -34.06% return in the past 3 months.
In April 2022, we also shared another hedge fund’s views on Gannett Co., Inc. (NASDAQ:GCI) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.