10. Gannett
Shares of Gannett Co. Inc (NYSE: GCI) trade for slightly below $14. The country’s largest newspaper company and the owner of USA Today reported Tuesday a 2% revenue drop to $1.3 billion. Digital advertising rose 13% to $173 million, but that was not nearly enough to offset battered print sales. Gannett’s shares traded just above $86 in early 2004, before online ad sales had become a significant revenue stream in
comparison to newspapers or TV. By March 2009, when print advertising was in free fall, they’ve reached a low of $2. Gannett continues to cut jobs, and recently laid off 700 workers, but eventually it will run out of people. The company cannot compete effectively in a world in which firms like Facebook have 700 million users and control a lion’s share of the online market. Print advertising has become an inefficient way to reach people who can be targeted by demography and product preferences online.

It is hard to imagine how any newspaper company could reach previous highs. Gannett has cable and broadcast TV operations. But neither is considered undervalued because each is a part of old media. Even broken into parts, Gannett is not worth terribly more than is reflected in its stock price.

Jon Ogg & Douglas A. McIntyre