Chicago-based publisher RR Donnelly& Sons
Stagnant sales are only one problem at RR Donnelly, which is valued at $3.3 billion. Declining earnings is another. Donnelly's shares have suffered for several years as printing and publishing have slowed, pummeled by a weak economy, competition, and changing technologies. During the boom, Donnelly attempted to expand into the Internet space with Web design and programming divisions, but it subsequently closed most of these ventures.
Acquiring Moore is a clear sign Donnelly now hopes to find growth again by sticking to its roots. Meanwhile, the five-year decline finds Donnelly boasting a 3.7% dividend yield. Even so, the stock does not yet look cheap for a troubled company, valued at about 19 times forward earnings estimates.
Heading into the Moore acquisition, Donnelly had (as of June) $770 million in long-term debt. It generated $35 million in free cash flow in the June quarter. Given its size and relative financial health, Donnelly isn't going anywhere, and with new management taking the helm, it could eventually be a turnaround story worth keeping an eye on.
But that's about all it is for now.