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Gannett Corp. (NYSE:GCI)

Originally recommended on Aug. 24/09 at US$8.16. Closed Friday at US$16.10. (All figures in U.S. dollars.)

Given the troubles facing CanWest Global (OTC:CWGVF), which has been forced by creditors to put its national newspaper chain on the auction block, you'd think newspapers were a dying breed. Well, perhaps they are but you wouldn't know it from the performance of this stock recently.

Since we recommended Gannett a few months ago at $8.16, it has almost doubled in value. In my last update in October, I suggested taking half-profits at $13.22 for a gain of 62% in just two months. The price has gone up almost $3 since then so the question is: what now?

The analysts' view of this stock is mixed. The reason is that of all the newspaper companies, Gannett has a significant number of online assets like careerbuilder.com, cars.com, Point Roll, etc. Combined with some of their broadcast assets and dominant local news positions these make Gannett a reasonable play against an improving economy and more robust advertising environment.

Earlier this month at an investor conference, Gannett U.S. Community Publishing President Bob Dickey said ad trends at the company's newspapers are improved during the fourth quarter across the classified, online, and retail categories. He added that more improvement is expected for 2010, "as more advertising and marketing dollars are spent."

If you've already booked half profits, hold onto the rest of your stock. If you haven't, do so now but I would continue to hold a position in this company.

Disclosure: long GCI

Source: Profit Taking Time at Gannett