By the numbers: GCI vs. NYT, Washington Post

Compared to New York Times Co. and Washington Post Co., Gannett has long been known on Wall Street more for the quality of its earnings than the quality of its news gathering. That’s why investors historically gave GCI’s stock a higher “earnings multiple” — or P/E, a smart reader notes in an e-mail.

But now, as investors steel themselves for the release of second-quarter earnings on Wednesday, my reader notes a fascinating trend: Compare the performance of GCI vs. New York Times and Washington Post Co. over the past five years, and you see Gannett’s stock is now performing worse than the other two. Washington Post moved ahead in 2004; the NYT passed GCI four months ago, Yahoo Finance says, in this chart.

“In general,” Investopedia says, “a high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E.”

Now, look at the current P/Es for the three companies:

“That’s a pretty glaring difference,” my reader says in an e-mail. “It shows that the Post’s diversification into other areas, mainly its Kaplan education biz, has buffered it from the downturn at the paper. Less so at the Times. E.W. Scripps wisely moved into cable programming that was lucrative enough for a spinoff. GCI has no such possibilities. I personally don’t see much prospect in a spinoff of local TV stations. How exciting could a standalone of bad Gannett TV stations be?”

Earlier: As media shares plunge, GCI skids another 4%

Your thoughts, in the comments section, below. To e-mail confidentially, use this link from a non-work computer; see Tipsters Anonymous Policy in the green sidebar, upper right.

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4 Responses to “By the numbers: GCI vs. NYT, Washington Post”

  1. Anonymous Says:

    It is scary when journalists start playing the role of analyst.

    Larry St. Cyr to the rescue!!!

  2. Anonymous Says:

    I’m seeing that name a lot lately. Why?

  3. Anonymous Says:

    Anon @ 8:02 a.m. … I’m pretty sure it’s meant sarcastically. But if you want to know who Larry St. Cyr is …
    http://www.linkedin.com/pub/4/08B/339

  4. Anonymous Says:

    Love the references to Scripps, Belo and others who have broken up their companies. What a wise choice!

    Oh, but there was this story this week in the WSJ:”Lehman downgraded the shares of Scripps, Wednesday, saying it preferred the company before it spun off”

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