GANNETT CO., INC. $35 - New York symbol GCI

GANNETT CO., INC. $35 (New York symbol GCI; Conservative Growth Portfolio, Consumer sector: Shares outstanding: 227.8 million; Market cap: $8.0 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.3%; TSINetwork Rating: Average; www.gannett.com) publishes newspapers in the U.S. and U.K., including USAToday, its flagship paper. The company also owns 46 TV stations and websites that attract over 39 million unique visitors a month.

In the three months ended March 29, 2015, Gannett’s revenue rose 4.9%, to $1.5 billion from $1.4 billion a year earlier. Strong gains at the broadcasting and digital divisions (49% of the total) offset an 8.8% decline at the publishing businesses (51%) due to weak ad revenue. Earnings improved 4.3%, to $0.49 a share from $0.47.

The company still plans to spin off its publishing operations as a separate firm that will keep the Gannett name. The remaining company, called Tegna (New York symbol TGNA), will own the broadcast and Internet businesses.

Gannett expects to complete the spinoff in mid-2015. Investors aren’t liable for capital gains taxes until they sell their new shares.

The stock is up just 3% since Gannett announced the spinoff in August 2014. That’s due to concerns over falling advertising revenue. However, studies have shown that spinoffs tend to outperform groups of comparable stocks for several years.

Gannett is a buy.

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