NEW YORK (TheStreet) -- Shares of Gannett Co. (GCI) are up 2.45% to $28.47 in pre-market trade after Barron's said the company "hasn't lost its innovative roots" and that the shares could increase 40%.
Most investors view Gannett as a dinosaur. At a recent $28, it was trading at under 11 times earnings estimates for the next 12 months, making it one of the cheapest stocks in the Standard & Poor's 500, the publication said.
TheStreet Ratings team rates GANNETT CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate GANNETT CO (GCI) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, reasonable valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, GCI's share price has jumped by 29.31%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GCI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Despite its growing revenue, the company underperformed as compared with the industry average of 14.9%. Since the same quarter one year prior, revenues rose by 13.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 357.52% to $166.00 million when compared to the same quarter last year. In addition, GANNETT CO has also vastly surpassed the industry average cash flow growth rate of 6.14%.
- 45.53% is the gross profit margin for GANNETT CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 4.21% trails the industry average.
- You can view the full analysis from the report here: GCI Ratings Report