Gannett: Compelling Risk Reward Due To Overblown Regulatory Risk
- With completed acquisition of Belo, Gannett is transforming itself into more of a broadcasting play (high growth, high margin business).
- FCF yield for Gannett is forecast at a whopping 12-13% (2014-15), pointing to significant under-valuation.
- Potential new regulation (greatest share overhang) would have immaterial impact to Gannett (5% EBITDA reduction on worst case).
- Easing regulatory risk premium and 40% EBITDA growth delivery are powerful catalysts to re-rate Gannett substantially.
- Compelling risk reward ratio mainly due to overblown regulatory risk.