New York Times, Gannett Booking Profits - But Not Long Term Holds

Includes: GCI, NYT
by: Glenn Rogers

Gannett Corp. (NYSE: GCI)

Originally recommended on Aug. 24/09 (IWB #2931) at $8.16. Closed Friday at $13.22.

New York Times (NYSE: NYT)

Originally recommended on Aug. 24/09 (IWB #2931) at $8.06. Closed Friday at $10.74. (All figures in U.S. dollars.)

When I recommended these newspaper stocks in August they were trading just over $8 a share. They have both had a nice run since then. Gannett closed on Friday at $13.22 for a gain to date of 62%. The New York Times had been lagging behind but moved up over 22% on Thursday after reporting better than expected results. We are now ahead 33.3% on this one in just two months.

Both companies are still suffering declines in their various revenue lines but they are starting to see some improvement in advertising spending. Both have aggressively been cutting costs and this is starting to have a very positive effect on the bottom line. However, companies cannot succeed for the long term without revenue growth and both Gannet and the Times will continue to be challenged in this area for some time.

When I recommended the stocks I made it clear that I did not see them as long-term holds. I would at least take half profits here and play with the house's money going forward.

Action now: Take half profits for a gain to date of 62% on Gannett and 33.3% on the Times.