Investor Prem Watsa
) bought a large chunk of Canada-based media company and owner of Canada’s largest daily newspaper Torstar Corp. (TSX:TS.B
) that increased his ownership to 27.4% of the company, he reported Thursday.Watsa, whose investment vehicle Fairfax Financial (TSX:FFH
) often draws comparisons to Warren Buffett
)’s Berkshire Hathaway (NYSE:BRK.A
), acquired 3,539,400 of Torstar’s Class B shares, equivalent to 4.9% of those outstanding. Watsa acquired the shares in the midst of their 40% slide this year from a price of $2.78. He purchased 939,400 of the shares on June 3 at a price of $1.77, and 2.6 million Thursday when the price dropped to $1.40.Fairfax, a conglomerate that often acquires whole companies, bought the shares on the open market, and may continue to buy more in the future, it said.
Torstar owns hundreds of daily and community newspapers, specialty publications and digital media interests and has seen revenue and earnings declines in recent years. In the most recent second quarter, it produced a net loss of $23.9 million or 30 cents per share, compared to $1.1 million or 1 cent per the same period a year ago. Revenue declined 9.4% to $196.5 million in the second quarter from $216.9 million a year ago.In the past five years, its revenue has declined at an annual rate of 14.3%, while book value was erased at a rate of 3.8%. Torstar ended the second quarter with $24.1 million in cash and no long-term debt. Its dividend, maintained at 13.125 cents for four years, has been cut to 2.5 cents the start of 2015. On July 6, Torstar announced the retirement of its president and CEO, David Holland.Torstar’s stock price fell 83% over the past five years and traded at 1.64 Canadian dollars per share on Wednesday, giving the company a $119 million market cap. Watsa has had a penchant for ailing companies at rock-bottom prices in recent years. He has an 8.94% stake in smartphone maker BlackBerry (NASDAQ:BBRY
) as his largest portfolio position, which he started more than five years ago. He has also taken an active role in the turnaround effort at the company, whose stock price dropped 74% over the past five years.
See Prem Watsa
)’s portfolio here
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