For Immediate Release

Chicago, IL – April 22, 2010 – Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week’s analysis include News Corp. (NWSA), (NWS), EW Scripps (SSP), Gannett (GCI) and McClatchy (MNI).

Zacks Industry Rank Analysis is written by Dirk Van Dijk, CFA, Chief Equity Strategist for Zacks.com.

Printing Money

The Newspaper Industry has been consistently one of the top groups for the last four or five months. While relatively small with just 8 firms in it (actually 7 firms, but it includes two separate classes of stock for News Corp. (NWSA) and (NWS), both of which currently have Zacks #2 Ranks. The industry is currently in 7th place among the 255 different industries we track, unchanged from a week ago.

Newspapers did see an improvement in the average Zacks rank to 1.88 from last week’s 2.00. Three of the firms in the industry have the coveted Zacks #1 Rank (Strong Buy), which is awarded to only 5% of all firms in the Zacks universe (as opposed to brokerage firm ratings, where Strong Buy recommendations are a dime a dozen). These firms are EW Scripps (SSP), Gannett (GCI) and McClatchy (MNI).

Last week, Gannett reported EPS of $0.50, which was $0.09 or 22.0% above the consensus expectations of $0.41. That has caused a 7% increase in its mean estimate for this year, with it rising to $2.24, and making its P/E based on this year’s earnings just 8.2x.

While the industry does face some long-term challenges in the form of decreasing readership as people get more of their information off the web rather than off the page, they also have significant operational leverage to higher advertising spending as the economy picks up, and also the ability to throw off significant amounts of free cash flow.

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Contact: Dirk Van Dijk, CFA
Company: Zacks.com
Phone: 312-265-9211
Email: pr@zacks.com
Visit: www.zacks.com

 

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