NEW YORK (TheStreet) -- Gannett (GCI) spinoff TEGNA (TGNA) mixes car sales, the Internet and television. And it's perfect to park in your portfolio, said Bill Smead, fund manager for the Smead Value Fund.
"They own all of Cars.com and 46 network affiliate TV stations, so they are the advertising vehicle of choice for local auto dealers," said Smead at this year's Morningstar conference in Chicago. "For example, Warren Buffett just bought Van Tuyl, a major auto dealer, and thinks that's a great business to be in. Why? Because a ton of millennials that don't yet own cars are going to get married, have kids, and need cars that fit car seats, and those local auto dealers are going to advertise a lot."
Gannett announced its plans in August 2014 to split into two publicly traded companies: a broadcasting and digital company operating under the name TEGNA, and a publishing company that retains the name Gannett. Shares of Gannett were were down 1.67% at the close Monday, while TEGNA's stock was up 4.65%.
Smead is also bullish on the banks, especially Bank of America (BAC), which he says is in a much better position now that it has paid the majority of its fines relating to the 2008 financial crisis and its aftermath. Shares of Bank of America are down about 5% year-to-date.
"Their moat has widened substantially," said Smead. "They have an inordinately large part of the deposits in the United States, and when the millennials go to borrow money to buy houses and cares they will get a disproportionately large part of that business."