Billionaire investor Leon Cooperman (Trades, Portfolio) continued amassing shares of New Media Investment Group (NYSE:NEWM) as the stock tanked Monday on news it would acquire U.S. news giant Gannett Co. (NYSE:GCI).
Shares of New Media have declined 33% since their open Monday, just before the company said it would pay $1.4 billion for the owner of USA Today and around 100 local media brands. New Media, one of the largest publishers of local media in the U.S., said it would pay Gannett shareholders $6.25 in cash and 0.5427 of its shares per share of Gannett they owned. Together the companies would form the largest newspaper company in the U.S., aiming to save $175 million to $300 million in costs annually.
Cooperman's interest in New Media predated its Gannett acquisition. Just this year, the Omega Advisors founder has reported buying its shares four times. In the Aug. 5 transaction, he boosted the position 16.27%, buying 813,910 shares. His average price per share was $9.86.
Cooperman also bought 956,090 shares on July 23 when the price averaged $10.32, 826,871 shares on July 19 when the price averaged $9.81 and 677,329 shares on May 9 when the price averaged $10.07.
His aggressive buying began in the first quarter, when he purchased 2,517,400 when the price averaged $13.
As of Wednesday, the investor holds 5,816,600 shares, representing a 9.61% stake in New Media. Its 3.5% weighting in his portfolio places it among his 10 largest holdings.
New Media has increased revenue at a rate of 8.2% over the past five years, and has $25 million in cash and $435 million in long-term debt as of the March quarter. The company trades with a price-earnings ratio of 41.84, price-book ratio of 0.6 and price-sales ratio of 0.3. After declining 39% year to date versus a 15% rise in the S&P 500 index, its stock closed at $7.11 per share on Wednesday.
Cooperman, a value investor, told CNBC on July 31 that he was not buying new positions because "we're in an advanced part of the cycle," although he said 10-15% more upside to the bull market.
"A lot of the things we have, we really are very enthusiastic about," he said.
Cooperman holds 56 stocks in his long portfolio at Omega Advisors, giving the largest space to positions in First Data Corp. (NYSE:FDC) and Alphabet Inc. (NASDAQ:GOOGL) as of second quarter-end. In June 2018, he announced he would turn New York-based Omega into a family office and manage primarily his own wealth.
Read more here:
Bill Ackman Exits Positions in United Technologies and Automatic Data Processing
Tweedy Browne Buys 2 Stocks, Adds to 3 in 2nd Quarter
Yacktman Asset Management Buys 3 Stocks in 2nd Quarter
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
This article first appeared on GuruFocus.
- Warning! GuruFocus has detected 3 Warning Signs with NEWM. Click here to check it out.
- NEWM 15-Year Financial Data
- The intrinsic value of NEWM
- Peter Lynch Chart of NEWM