Diversity Cuts Transcontinental’s Risk

Article Excerpt

TRANSCONTINENTAL INC. $19 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; SI Rating: Average) is a major North American commercial printing company with three main divisions: the Information Products division prints books, newspapers and magazines (30% of its revenue); the Marketing Products unit prints advertising materials and provides direct marketing services (45%); and the Media division publishes newspapers and magazines (25%). These businesses are highly cyclical. However, Transcontinental gets over half of its revenue from businesses less exposed to ad spending, such as books and newspaper printing. Also, much of its advertising revenue comes from less cyclical industries like food, health and personal care products. Acquisitions fueled revenue growth Transcontinental has expanded its direct marketing operations recently, mainly through the purchase of two U.S.-based direct marketing firms for $255.7 million. These and other acquisitions helped increase Transcontinental’s revenue, from $1.8 billion in 2001 (fiscal years end October 31) to $2.2 billion in 2005. Earnings from continuing operations and before unusual items rose from $1.26…

You are trying to access subscriber-only content.

To read this article, you may subscribe or sign in.
If you are already a subscriber, log in here.

If you wish to become a subscriber, click here. Or you may enjoy access to all our publications when you become a Member of Pat McKeough's Inner Circle Pro.