Avoid This Garbage

• Report this Comment On November 18, 2009, at 5:45 PM, Newshound3 wrote:

  I second the above posting! Real question is what does this foolish writer have to gain by trashing solid stocks? LEE is not only up 226.9% in 6 months, it is up 1,467% since last December! It is a solidly run business with a long, upstanding track record that is coming back, as it should! I see this stock in the $10 - $12 range within a year, which makes it a solid growth stock.

• Report this Comment On November 18, 2009, at 6:11 PM, Varchild2008 wrote:

  Debt Ratios are misleading... You can't judge a company purely based on Debt Ratios and Revenue hits year over year...Ask yourself these 1 Qs as a starting point for research:

  1) Where's the momentum NOW? Sure revenue declined last year and year before.... But, what about last quarter or two this year??? Is there currently a rebound?

  If so.... Then is this rebound...increase in revenue going to be enough momentum to pay off the debt when it matures?

  2) When the company's sales got hit bad was it bad management? Is the same management team that screwed up still in charge?

• Report this Comment On November 19, 2009, at 10:45 AM, sundaypapers wrote:

  I've got it on good authority that while columnists like this one were trash-talking newspapers stocks, folks like me were able to buy Lee and McClatchy for 40-60 cents a share and watch them soar to $3-$4.

  They were priced for bankruptcy, and now that seems increasingly unlikely. I took big profits, but I'm keeping some shares in my retirement account, too.

  These are solid businesses that will bounce back large when automotive and real estate advertising recovers. Their large debt loads will become increasingly manageable.

• Report this Comment On November 19, 2009, at 1:24 PM, questfordollars wrote:

  sundaypapers called it well. These stocks have NOT increased based upon positive revenue, earnings potential, etc. They were previously priced with VERY significant bankruptcy risk. Lee Enterprises was able to renegotiate the terms of its debt when many were afraid they would be forced to file for bankruptcy (stock was trading around $0.25 at the time). Recent earnings reports show the company will be able to meet new debt covenants. Thus, the company is being revalued as the probability of bankruptcy diminishes.

  If the company is worth $8 today and $0 in bankruptcy investors are pricing a 50% chance of it going either way. Under prior terms of the debt the probability of bankruptcy was significantly higher. While the models are far more complex than this and have different drivers, that's the simple version. If the probability of bankruptcy continues to decline and the company also manages to lower expenses there is still upside in the stock.

  Everyone knows that in the end these companies will need to increase revenue at some point, but that's a very small driver of the stock's price when compared to the threat of bankruptcy. All of the newspapers are scrambling to find and new business model for the industry. That's the next wave of value for newspapers, but for the moment the fact that these companies can sustain their existence and generate sufficient cash to pay down their debt is far more significant.

• Report this Comment On November 19, 2009, at 2:32 PM, savvyelrod wrote:

  Mclatchy stock is moving due to so called investors playing the almost predictable up and down swings if 10% or more daily. This is gambling. Nothing wrong with gambling unless you call it investing, lots of folks that visit Vegas feel they are investing. The paper industry is likely doomed, much like Kodak, it's not that people are not buying camers or printing photos. It's just they are not using Kodachrome film and will never return to film. Same goes for the paper industry, folks are getting more news than ever, just from differnt places. As the older generations move on to internet, cable TV and other venues for news, the papers will continue to decline in subscriptions and revenue. Younger folks are never going to follow their parents habit of picking up the paper from the driveway and reading a paper version of the news at the breakfast table. Craigs List took away all advertising except realestate and legal notices. The backbone of newspaper revenue. Sometime in the future the MLS or some internet site will be able to tap into the MLS listings and zappo, newspapers will have zero revenues. Their stock will likely return to the 20-50 cents per share just before the plywood goes over the windows of Mclatchy headquarters. If you are holding Kodak stock then Mclatchy likely fits into your investments.

• Report this Comment On November 19, 2009, at 6:19 PM, philmccraken wrote:

  Alyce sounds like an disgruntled employee. Or she is angry at missing out on some smart buys. Either way, the only stinky garbage in this picture is Alyce's predictions. Foolish words indeed.

• Report this Comment On November 20, 2009, at 12:52 PM, eldora21 wrote:

  As a former Lee employee, I am betting with my own money that top management will get the St. Louis market figured out and turn that loser into a winner. That market is the financial key to returning the company to its decades-old reputation as a consistently well-managed company that out-performed its peers. The Pulitzer acquisition was the disaster that nearly sank the ship. Given time, and maybe a change in the boardroom, this company will re-emerge as a great success story. It's a buy all the way to $6 per share for those with a 3 year timeline. Don't expect the dividend to come back for many years. It will go to debt service.

  John

• Report this Comment On November 25, 2009, at 11:23 AM, schuang74 wrote:

  Well apparently Alyce doesn't do her homework either... Grubb & Ellis is no loger "debt-laden" granted this is due to an infusion of capital by various investors however that shouldn't take away the fact that they have no debt on their balance sheet. Given the date of this article Alyce should have known that if she even bothered to read the SEC filings... so much for credibility

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