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Should Value Investors Buy Gannett Co. (GCI) Stock?

Zacks Equity Research

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Gannett Co. (GCI). GCI is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 17.58 right now. For comparison, its industry sports an average P/E of 21.03. Over the past 52 weeks, GCI's Forward P/E has been as high as 19.69 and as low as 7.69, with a median of 14.33.

Investors should also recognize that GCI has a P/B ratio of 1.12. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.31. Over the past year, GCI's P/B has been as high as 1.29 and as low as 0.84, with a median of 1.04.

Finally, investors will want to recognize that GCI has a P/CF ratio of 7.35. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. GCI's P/CF compares to its industry's average P/CF of 13.28. Within the past 12 months, GCI's P/CF has been as high as 7.86 and as low as 5.53, with a median of 6.82.

Value investors will likely look at more than just these metrics, but the above data helps show that Gannett Co. Is likely undervalued currently. And when considering the strength of its earnings outlook, GCI sticks out at as one of the market's strongest value stocks.


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