Although the level of debt was of great concern, the company began to pay it down. By year-end 2010, debt was reduced to $2.5 billion, and the company was highly profitable and putting up better-than-expected numbers.

In September 2011, the company doubled its quarterly dividend from 4 cents a share to 8 cents. Just two quarters later, Gannett increased the dividend by 250%, to 20 cents. By then, debt was down to $1.4 billion, and the company was also buying back stock. GCI Long Term Debt Chart GCI Long Term Debt data by YCharts

The stock is now up 13 times the low point it hit back in 2009. Along the way, skepticism has remained in the markets and among analysts, and the company has traded at very low multiples at times. Perhaps newspaper companies deserve low multiples. But the announcement of yesterday's deal might finally deal with the perception of what Gannett really is.

Even with yesterday's blistering performance, the stock yields 3%, and trades at about 11 times the 2014 consensus estimate, which does not yet include the potentially accretive nature of the acquisition. I believe that there also may be room for further dividend increases, but time will tell.

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
At the time of publication, Heller was long XXXX.

Jonathan Heller, CFA, is president of KEJ Financial Advisors, his fee-only financial planning company. Jon spent 17 years at Bloomberg Financial Markets in various roles, from 1989 until 2005. He ran Bloomberg's Equity Fundamental Research Department from 1994 until 1998, when he assumed responsibility for Bloomberg's Equity Data Research Department. In 2001, he joined Bloomberg's Publishing group as senior markets editor and writer for Bloomberg Personal Finance Magazine, and an associate editor and contributor for Bloomberg Markets Magazine. In 2005, he joined SEI Investments as director of investment communications within SEI's Investment Management Unit.

Jon is also the founder of the Cheap Stocks Web site, a site dedicated to deep-value investing. He has an undergraduate degree from Grove City College and an MBA from Rider University, where he has also served on the adjunct faculty; he is also a CFA charter holder.

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