Legendary guru Chuck Royce (Trades, Portfolio) is a Brown University graduate and received an MBA from Columbia University. Royce is known as one of the fathers of small cap investing. Royce Funds likes to focus on micro cap, small cap and small/mid-cap securities that have value within their industries and also have strong balance sheets. Royce has nearly 55 years of investment experience and 44 years of experience managing the Royce Funds.
In the first quarter, Royce added 100,000 shares of The McClatchy Co. (MNI, Financial)
McClatchy is a leading news and information provider dedicated to the values of quality journalism and free expression. The company dates back to 1857, during the California Gold Rush, when James McClatchy was one of the founding editors of its first newspaper, The Sacramento Bee (at the time, it was called The Daily Bee). For more than a century, the company stayed in California. It was not until 1979 when McClatchy expanded into the northwest with the purchase of the Anchorage Daily News and the Tri-City Herald in Kennewick, Washington. Since then the company has expanded and now operates with 29 daily newspapers in 28 U.S markets, all of which are growing much faster than the U.S average according to the company website.
McClatchy has a market cap of $95.52 million, an enterprise value of $991.6 million, a P/B ratio of 0.48 and a quick ratio of 1.14.
According to GuruFocus, McClatchy has a 5/10 Financial Strength rating with a 0.01 cash to debt ratio. This ranks it beneath 99% of the 189 companies in the industry. The company also has a 4/10 Profitability and Growth rating according to GuruFocus.
Below is a Peter Lynch Chart for McClatchy showing that the company is undervalued.Â
It is possible that Royce decided to add 100,000 shares of McClatchy because the company has 159 years of experience and has been able to execute and successfully expand its operations.Â
Cheers to your investment success.
