Trinity Mirror Plc.

Fitz123

I still regard myself as quite a novice in the investing world. So the below are a summation of my thoughts on Trinity Mirror, to see if the more experienced among you wish to pick some holes in it, and see whether you agree it is a potential buy.

At a share price of 37 p they are currently trading not much above the 52 week low of 34p and well below the 52 week high of 56p. Currently market value is approx £95 million.
(http://www.lse.co.uk/SharePrice.asp?shareprice=TNI) Recent director purchases also.

2011 prelims were released a number of weeks ago (http://www.trinitymirror.com/pdf/PreliminaryAnnouncement.pdf). The companny is profit making(£74.4 profit before tax (yes, there are rather large pension related losses in SOCIE)) and cash generative (£75.9 million from operations), having reduced debt by £145 million during the year. Net assets in comparison to market value look like they provide a decent margin of safety being £675 million. However there are large amounts of goodwill and intangiables that may need to be written down in the future.

Pensions are an issue for the company but there have been articles stating that an agreement has been reached with trustees for a 3 year contribution reduction in order to concentrate on reducing debt (Pensions authority may look into this however.)

Obviously the traditional newspaper industry faces huge competition from digital media etc, and reduced advertising rates currently don't help. The Mirror appears to be mired in the dirty tricks scandle which will also have implications for the company, with the negative publicity no doubt weighing on the share price.

Personally, I think this share is cheap, but I may be focusing too much on the numbers here, rather than the underlying business. What do you think ?

OfflerCrocGod

Please analyze the reasons why it is so lowly rated further, those once properly understood may outweigh the low rating of the stock price in your calculus.

You have already made a start.

liammur

Fitz123 wrote: »

I still regard myself as quite a novice in the investing world. So the below are a summation of my thoughts on Trinity Mirror, to see if the more experienced among you wish to pick some holes in it, and see whether you agree it is a potential buy.

At a share price of 37 p they are currently trading not much above the 52 week low of 34p and well below the 52 week high of 56p. Currently market value is approx £95 million.
(http://www.lse.co.uk/SharePrice.asp?shareprice=TNI) Recent director purchases also.

2011 prelims were released a number of weeks ago (http://www.trinitymirror.com/pdf/PreliminaryAnnouncement.pdf). The companny is profit making(£74.4 profit before tax (yes, there are rather large pension related losses in SOCIE)) and cash generative (£75.9 million from operations), having reduced debt by £145 million during the year. Net assets in comparison to market value look like they provide a decent margin of safety being £675 million. However there are large amounts of goodwill and intangiables that may need to be written down in the future.

Pensions are an issue for the company but there have been articles stating that an agreement has been reached with trustees for a 3 year contribution reduction in order to concentrate on reducing debt (Pensions authority may look into this however.)

Obviously the traditional newspaper industry faces huge competition from digital media etc, and reduced advertising rates currently don't help. The Mirror appears to be mired in the dirty tricks scandle which will also have implications for the company, with the negative publicity no doubt weighing on the share price.

Personally, I think this share is cheap, but I may be focusing too much on the numbers here, rather than the underlying business. What do you think ?

I've a big position in TNI. 1 of the most undervalued shares on the market. Has been undervalued for a year, that's the problem.

Fitz123

Thank you both for your replies, I appreciate it.

Yes point noted re reasons share price is so low, have done some more reading this afternoon around it.

It is good to see someone else agrees with me saying they believe they are undervalued. But as you say they have been low a while. Will probably look at buying in this week, as a 10% or so portion of my portfolio

Gloomtastic!

Coming from an non-investor aspect but someone who worked in the newspaper/publishing business for years.

Sly Bailey, the CEO, has not added any new revenue since she took up the job years ago. She's just managed declining revenues with job cuts. Her background was with IPC magazines - once Europe's largest consumer publisher but as far as I'm aware has never made a profit.

Just my 2 cents worth, personally I don't think the share price will be going up anytime soon.

liammur

Sly Bailey,,,share price has fallen 90% odd since she took over :mad:
L&G are selling their stake, and Schroders are increasing. I'm hoping for a bounce once L&G are finished.

OfflerCrocGod

Fitz123 where do you see the company in, say, 10 or 20 years time?

Fitz123

Croc, in 10 or 20 years time, no clue. I believe the newspaper industry is dwinlding and will do so into the future.

However this investment is not meant for the long term for me, it is currently very cheap as Liam says, even being relatively pessimistic about the future. I am investing for the short term on this waiting for a trigger for the price to move up to a more normal level.

OfflerCrocGod

Fitz123 wrote: »

Croc, in 10 or 20 years time, no clue. I believe the newspaper industry is dwinlding and will do so into the future.

However this investment is not meant for the long term for me, it is currently very cheap as Liam says, even being relatively pessimistic about the future. I am investing for the short term on this waiting for a trigger for the price to move up to a more normal level.

So you are hoping for a greater fool and to be able to time an exit correctly?

Fitz123

Not at all Croc.

As I posted in my figures above, the business is profitable, cash generative and paying down debt. I think it is worth more than it's current market value. Yes the business will deteriorate over time, but the cash I feel it can throw off in that time is more than it's current value.

I intend to hold for approx 2 years which is short term for me.

neris

had a brief look at the 5year financials on tddirect earlier. Seem to be all over the place. big loss one year massive profit next year and steady profits but alot less then year 4

Fitz123

Neris, they had a loss in 2008 of about £88 million. This is as a result of writing down their intangiable assets (i.e. the value of their newspaper titles etc) by £190 million and a restructuring charge of about £25 million. I'd have to look at the annual report again for full details.

It seems mad now but they bought £101 million in shares under a buyback programme that year too, which is more than the entire company is worth today !!

OfflerCrocGod

Fitz123 wrote: »

Not at all Croc.

As I posted in my figures above, the business is profitable, cash generative and paying down debt. I think it is worth more than it's current market value. Yes the business will deteriorate over time, but the cash I feel it can throw off in that time is more than it's current value.

I intend to hold for approx 2 years which is short term for me.

Do not forget shareholders are the last people to have a claim on that cash. If you believe that cash is coming to an end you need to be certain that the other claimants will leave something for equity holders.

Fitz123

True Croc.

I do feel with cost cutting, and cash being generated there is free cash flow enough to pay back debt and provide a good return to shareholders. The pension deficit is a worry in that regard, but many companies have a similar time bomb ticking away.

I guess we will wait and see !

Fitz123

Interesting ride on these since having purchased, finally in the black on them ! Am still relatively confident for the medium term.

Fitz123

Up nicely and at 53.75 now. Debt repayments continuing and a new CEO in place. Quite a decent return since original post.

liammur

Fitz123 wrote: »

Up nicely and at 53.75 now. Debt repayments continuing and a new CEO in place. Quite a decent return since original post.

Disgusted I sold out of TNI a month or so ago for a loss. GL with your holding.

Fitz123

Ty Liam. A decent move again today. I saw you mention the figures you had in it, can only wish I was near that.

liammur

Fitz123 wrote: »

Ty Liam. A decent move again today. I saw you mention the figures you had in it, can only wish I was near that.

Yeah, I'd a big position, ended taking a loss on it. Maybe if I had smaller I'd have held.

turbobaby

Congrats Fitz. Very well done.

Fitz123

Cheers Turbo,

Up again today to 67 p on heavy volume.

Interesting article on it here;

http://uk.finance.yahoo.com/news/trinity-mirrors-dramatic-rise-continues-123209935.html

neil.p.b

Well done Fitz. You must be up close to a 100% at this stage? Not bad for 6 months!

Have you top-sliced? Prices are sitting at resistance now and techs are looking over heated (though not always a bad thing as they always are when a stock has strong momentum). If i was you i'd watch tomorrow closely, if prices can only get moderately ahead, or fall below todays close it's a sure tell sign that todays high volume was due to smart-money leaving the stock. If it does race ahead you should see 78p fairly quickly.

But the thing i would emphasize is that recent rises like this aren't sustainable and retraces are to be expected and healthy ('when' is obviously the hard thing to get right!) - i'd imagine that 53p will need to be tested .

Good luck and well done again.

Neil

Fitz123

Cheers Neil, I had taken some profits as bought more shares below the 30p mark, and cashed those out once the sp got to 40p.

I know nothing of technical analysis, but yes expect a dip shortly for profit taking after such a rapid recent run up. Even at current prices I still think this share is relatively cheap (though wouldn't buy more at this price) I may take some more profits and then wait to see what happens at next update on 8 Nov.

Will think it over tonight, and try to think of another share to purchase wth profits !!

AP_MAN

spot on neil, heading to 78p...

neil.p.b wrote: »

Well done Fitz. You must be up close to a 100% at this stage? Not bad for 6 months!

Have you top-sliced? Prices are sitting at resistance now and techs are looking over heated (though not always a bad thing as they always are when a stock has strong momentum). If i was you i'd watch tomorrow closely, if prices can only get moderately ahead, or fall below todays close it's a sure tell sign that todays high volume was due to smart-money leaving the stock. If it does race ahead you should see 78p fairly quickly.

But the thing i would emphasize is that recent rises like this aren't sustainable and retraces are to be expected and healthy ('when' is obviously the hard thing to get right!) - i'd imagine that 53p will need to be tested .

Good luck and well done again.

Neil

neil.p.b

AP_MAN wrote: »

spot on neil, heading to 78p...

Don't know how spot on it was! I am getting ready to put on a short soon though...

AP_MAN

78.50 paid just now

Fitz123

Haven't been on here in a while, at this stage have fully taken my original investment plus some profit off the table. Still have a few k shares left, and happy to sit watching from the sidelines for the moment.

Keeping an eye out for anything more phone hacking related though !!

liammur

Fitz123 wrote: »

Haven't been on here in a while, at this stage have fully taken my original investment plus some profit off the table. Still have a few k shares left, and happy to sit watching from the sidelines for the moment.

Keeping an eye out for anything more phone hacking related though !!

Shows how irrational the market is. Unloved for months, now over valued imo. JPR is where the shorts should be placed.

Fitz123

Things ticking along very nicely now, and have crossed the 90p mark. Phone hacking seems to have gone quiet, and they have taken a stake in Local World a newly formed co that has purchased the Daily Mail & General Trust and Iliffe News & Medias local newspaper arms. There is talk that Trinity will also sell the local paper arm to Local World and some stage in the future (though imagine there could be competition issues with that)

May consider selling the remainder of my stake should it cross the £1 mark. But either way happy to sit and watch as have taken my entire original investment and some profit out.

Fitz123

Fully sold out last week in the high 90's. Happy with the result to say the least !! May buy back in on a dip.