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Wednesday, June 06, 2012 8:58:10 AM
June 6, 2012
Against the company's wishes, the SEC forced Warren Buffett's Berkshire Hathaway (BRK.B) to disclose its 3.2% or 1.66 million share stake in Lee Enterprises Inc (LEE). Following the news, shares of LEE spiked 31% in after hours trading. Prior to this move, shares of LEE were already up 58% so far in 2012.
Business Summary
From Yahoo Finance:
Lee Enterprises, Incorporated provides local news, information, and advertising services primarily in midsize and small markets in the United States. The company publishes 52 daily and 39 Sunday newspapers, 300 weekly newspapers, and niche publications in 23 states; and provides retail, classified, digital, and national advertising services. It also provides digital infrastructure and digital publishing services for approximately 1,500 daily and weekly newspapers and shoppers. The company was founded in 1890 and is based in Davenport, Iowa.
Bankruptcy Exit
LEE exited chapter 11 bankruptcy in late January. The bankruptcy was different than most in that stock holders retained a significant portion of the company. In the deal, debt maturities amounting to nearly $1 billion were extended through December 2015 and debt holders received a 13% equity stake in the company. The company's financial position is now much stronger than what it was prior to bankruptcy.
Will Berkshire Buy More?
I believe it is likely that Berkshire continues to buy shares of LEE for a few reasons. Firstly, it is likely that Buffett wanted to keep the position from being disclosed because he intends on buying more shares. Also, it is unlikely that Buffett would have started accumulating the stock if he was only interested in 1.66 million shares. Perhaps Buffett will slow his buying now that shares have moved significantly, but on a pull back I believe Buffet will continue to buy LEE. Ultimately, Buffett could be interested in buying the whole company. The new stake in LEE comes just after Berkshire announced plans to purchase most of the newspapers owned by Media General Inc (MEG) for $142 million and provide the company with a $400 million credit line.
My Take
I would not be a seller into the Buffett rally in LEE. Rather, I would look to buy shares if the stock gives up gains anytime soon. The company is now in better shape financially and Buffett's commitment to the newspaper business in general makes me more confident that LEE will continue to be accumulated by Berkshire.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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http://seekingalpha.com/article/640101-buffett-buys-lee-should-you?source=email_rt_article_title&ifp=0
LEE
Recent LEE News
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/04/2024 05:10:18 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/04/2024 05:08:42 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/04/2024 05:06:29 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/04/2024 05:05:04 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/04/2024 05:03:33 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/04/2024 05:01:26 PM
- Form 3 - Initial statement of beneficial ownership of securities • Edgar (US Regulatory) • 05/10/2024 06:23:40 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/08/2024 05:00:09 PM
- Lee Enterprises to Present at Sidoti Virtual Investor Conference • GlobeNewswire Inc. • 05/06/2024 03:00:00 PM
- Lee Enterprises reports second quarter Adjusted EBITDA growth and strong digital growth • GlobeNewswire Inc. • 05/02/2024 11:00:00 AM
- Lee Enterprises adds Chief Transformation and Commercial Officer • GlobeNewswire Inc. • 05/01/2024 11:00:00 AM
- Lee Enterprises plans quarterly call and webcast May 2, 2024 • GlobeNewswire Inc. • 04/22/2024 03:00:00 PM
- Lee Enterprises Adopts Limited-Duration Shareholder Rights Plan • GlobeNewswire Inc. • 03/29/2024 02:00:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/23/2024 03:19:22 PM
- Form SCHEDULE 13G - Statement of acquisition of beneficial ownership by individuals • Edgar (US Regulatory) • 02/20/2024 05:44:46 PM
- Form 3 - Initial statement of beneficial ownership of securities • Edgar (US Regulatory) • 02/16/2024 05:21:34 PM
- Form SC 13G - Statement of acquisition of beneficial ownership by individuals • Edgar (US Regulatory) • 02/14/2024 03:52:20 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/08/2024 09:30:02 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 02/02/2024 05:53:16 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/01/2024 07:12:06 PM
- Lee Enterprises reports first quarter Adjusted EBITDA growth and strong digital growth • GlobeNewswire Inc. • 02/01/2024 12:00:00 PM
- Form SC 13G - Statement of acquisition of beneficial ownership by individuals • Edgar (US Regulatory) • 01/22/2024 10:02:56 PM
- Lee Enterprises plans quarterly call and webcast February 1, 2024 • GlobeNewswire Inc. • 01/19/2024 08:49:00 PM
- Form DEFA14A - Additional definitive proxy soliciting materials and Rule 14(a)(12) material • Edgar (US Regulatory) • 01/12/2024 07:47:06 PM
- Form DEF 14A - Other definitive proxy statements • Edgar (US Regulatory) • 01/12/2024 07:41:50 PM
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