This past week, LEE reported decent numbers for the fiscal first quarter. The sole analyst that covers LEE has raised his earnings estimate for the full year from $0.24/share to $0.33/share. Estimates for 2014 were also raised. With LEE about to finish implementation of their paywalls coupled with the housing market looking like it has started to turn, we may see 2013 as the year revenues start to turn higher for LEE. A strengthening housing sector will help to drive this slow growth economy leading to higher employment and large ticket consumer goods purchases (autos, furniture, appliances, etc). With an improved economy, businesses will spend more on advertizing, including in the newspaper sector. This analyst might get more opportunities to raise guidance as we move through the year if this happens. LEE continues to be seriously undervalued by the market IMO.
Smartphones, tablets, 21st century delivery of news means little in the way of ad revenue that is measurable, trackable and evergreen. Auto sales have been strong for a year and auto advertising has barely moved up in print. I can't see realtors and builders rushing back to print anytime soon, and frankly, never again.
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