Lee Enterprises: Why We Still See Value In Lee

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About: Lee Enterprises, Incorporated (LEE), Includes: BRK.A, BRK.B
by: Saibus Research
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Saibus Research
Long/short equity, Deep Value, value, special situations

We have been long Berkshire Hathaway (BRK.B, BRK.A) since early last year. We took a stake in Lee Enterprises (NYSE:LEE) this year because of Warren Buffett's $85M investment in Lee's 2nd Lien Term Loans earlier this year. Although Berkshire Hathaway recently reduced its position in Lee Enterprises's common shares, there has not been any news with regards to if Berkshire has sold any of its 2nd Lien Term Loans, which is how Berkshire got its shares. According to Lee Enterprises's October Presentation at the Deutsche Bank 2012 Leveraged Finance Conference, Berkshire also held a portion of its 1st Lien Term Loan debt. We think that investors overreacted to the news that Berkshire sold out of