Exited Gannett (GCI)–95.04% Total Return in 21 Months

We bought Gannett Inc (GCI) in the Value Stock Guide portfolio on Mar 7, 2012 and various other times subsequently. Our average cost for the stock was $14.52/share. Today we sold our entire position in this stock at $27/share netting a capital gains of 85.40% and total returns of 95.04%. Both these numbers are net of commissions paid.

Total hold time of the stock was 1 year and 9 months.

In normal circumstances, I would have waited for the stock to reach my target sale price of $32/share, which I anticipated it would reach within 4 years of the recommendation. There were a few reasons to exit now

  • Belo acquisition is approved and the paywall rollout is complete. There does not appear to be any more catalysts in the near future
  • At the current market valuations, cash appears to be an attractive alternative
  • I am unlikely to wait for another 2 years for 18% more returns
  • New better value stocks have been uncovered that I want to ease into

We bought Gannett stock last year while media was still beating the drum of newspapers being a value trap, and months before Buffett declared his new found interest in this industry. To be fair, he did own GCI from years past (he purchased in 1994) and exited his position a few months ago. I was curious as to the price he might have paid in 1994 for the stock so I looked up the price history of the stock and it appears that he paid a price similar to what we paid, but 19 years ago.

I am making available my original recommendation on this stock to all my readers. As you are aware, the buy recommendations are sent to the Premium members when made and stay exclusive to them as long as we stay invested in the stock.

  1. GCI Recommendation – Part 1
  2. GCI Recommendation – Part 2
  3. GCI Recommendation – Part 3

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