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Should You Now Consider Disposing Your Gannett (GCI) Position?

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Miller Value Partners, an investment management firm, published its "Miller Value Partners Deep Value Strategy" second-quarter 2022 investor letter – a copy of which can be downloaded here. The Deep Value Strategy had a very disappointing second quarter experiencing significant valuation contraction during the period. For the quarter, the Deep Value Strategy was down more than 30%, significantly lagging the S&P 1500 Value Index and the overall market. For the year, the Strategy is down about 10%, ahead of the S&P 1500 Value Index and the overall market. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, Miller Value Partners Deep Value Strategy Fund mentioned Gannett Co., Inc. (NYSE:GCI) and explained its insights for the company. Founded in 1906, Gannett Co., Inc. (NYSE:GCI) is a McLean, Virginia-based mass media holding company with a $441.2 million market capitalization. Gannett Co., Inc. (NYSE:GCI) delivered a -43.53% return since the beginning of the year, while its 12-month returns are down by -47.83%. The stock closed at $3.01 per share on July 29, 2022.

Here is what Miller Value Partners Deep Value Strategy has to say about Gannett Co., Inc. (NYSE:GCI) in its Q2 2022 investor letter:

"Our two largest detractors during the quarter were Gannett (NYSE:GCI) and Quad Graphics (QUAD). Both companies’ share prices were adversely impacted by marketplace fears on a future pullback in advertising and marketing services over the coming quarters due to economic weakness. We continue to believe Gannett’s multi-year transformation plan to transition from an analog to digital media company has an opportunity to unlock significant equity value. We see limited value in the share price for the company’s Business-to-Business, digital marketing services (DMS) platform and Business-to-Consumer platform, which should generate high-margin, reoccurring subscription revenue over time. In addition, we believe Gannett’s sports medium, national events business, and sports betting operation are underappreciated assets. With a Price-to-Sales now less than .2x, the marketplace appears to be overlooking Gannet’s significant asset base and future free cash flow potential."

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Our calculations show that Gannett Co., Inc. (NYSE:GCI) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Gannett Co., Inc. (NYSE:GCI) was in 16 hedge fund portfolios at the end of the second quarter of 2022, compared to 14 funds in the previous quarter. Gannett Co., Inc. (NYSE:GCI) delivered a -24.94% return in the past 3 months.

In May 2022, we also shared another hedge fund’s views on Gannett Co., Inc. (NYSE:GCI) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.

Disclosure: None. This article is originally published at Insider Monkey.