With the positive quarter, we had some holdings that fared exceptionally well in the last three months. Diversified media company Gannett Co., Inc. (GCI
) rose +22.05% as political advertising mounted. As we have noted many times before, the market has a very short-term focus—which has been on full display with this company in 2012. Anyone who has been paying any attention over the last few elections knows that political advertising continues to expand dramatically with virtually every new cycle. Our internal analysis has had this reality front and center for well over a year, and yet when word broke in early September that political advertising had prompted a dramatic upwards push in advertising demand, the market acted as if it were a surprise. In our opinion, Gannett is a leaner, financially stronger company than it was a few years ago. Thus, the high returns it generates from the election season are likely to be put to work in ways that will boost profitability going forward.
From Ariel Funds' third quarter commentary