Patrick Soon-Shiong, vice chairman and 10% owner of Tronc Inc. (TRNC, Financial), purchased 2.9 million shares of the company for $14.87 per share on March 20, according to an SEC filing.
He now owns over 8.7 million shares of Tronc Inc.
Headquartered in Chicago, Tronc is a multiplatform media and marketing solutions company engaged in publishing print, digital and broadcast content.
The company's portfolio includes news and information brands for sports, entertainment, business, real estate and travel. Formerly known as Tribune Publishing Co., the company operates in the following markets: Los Angeles, San Diego, Chicago, Fort Lauderdale, Florida, Orlando, Baltimore, Hartford, Allentown, Pennsylvania and Newport News, Virginia.
The company’s media portfolio has earned it 93 Pulitzer Prizes.
Tronc has a market cap of $501.8 million, a price-earnings (P/E) ratio of 72.10, an enterprise value of $671.67 million and a price-book (P/B) ratio of 4.67.
According to GuruFocus, Tronc has a 5 of 10 financial strength rating. It has a cash-debt ratio of 0.54, an equity-asset ratio of 0.12 and an Altman Z-Score of 2.55, which suggests the company is experiencing minor financial stress. The Beneish M-Score of -3.11 indicates the company does not manipulate its financial statements. The Piotroski F-Score of 7 suggests Tronc has a healthy business situation.
The company has a 6 of 10 profitability and growth rating. It has an operating margin of 3.31%, a net margin of 0.41%, return on assets (ROA) of 0.76% and return on capital (ROC)Â of 48.62%, ranking it above 74% of the 171 companies in the global publishing industry.
Over the past five years, Tronc's revenue has declined an estimated -3.21%, its net income -15.40%, earnings power -16.55%, capital spending -11.96% and cash flow an estimated -4.98%. In contrast, its gross margin has grown 29.94% over that same period.
The company has several good indicators that might make it an appealing investment:
- Tronc is a well-known and established company with an estimated monthly reader base of 57 million.
- The company has gained solid momentum over the previous year. Its market price has gained an estimated 74%.
- Tronc has multiple streams of income from its advertising and digital content.
- The company is expanding its operations.
Tronc is trading above its intrinsic value, according to the Peter Lynch chart below.
Disclosure: Author does not own any shares of this company.
Start a free 7-day trial of Premium Membership to GuruFocus.
