This printer stands out in volatile industry

Article Excerpt

TRANSCONTINENTAL INC. $16 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 80.8 million; Market cap: $1.3 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.3%; TSINetwork Rating: Average; is the largest commercial printer in Canada and Mexico, and the fourth-largest in North America. This business provides 65% of its revenue and earnings. The company also publishes newspapers and magazines (30% of revenue and earnings). The remaining 5% comes from its marketing-communications division, which designs advertising campaigns, including direct mail, and analyzes customer-purchasing data. Less cyclical than it appears The printing industry is highly cyclical. However, Transcontinental gets over half of its printing revenue through long-term contracts of up to 18 years. The company cuts the cyclical risk of its publishing business by focusing on smaller cities with fewer competing newspapers. About half of the media division’s revenue now comes from local businesses. Transcontinental also has over 120 web sites. Revenue from the Internet accounts for just 1% of the…

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