Goldman Sachs: Gatehouse Media still a good buy

Goldman Sachs rates GateHouse Media as one of the better buys in the newspaper industry, according to an article posted today on Editor & Publisher:

"In an industry characterized by secular challenges, yet healthy free cash flow generation, we like the company's strategy of growing free cash flow through acquisition and returning it to shareholders in the form of a dividend," with a yield over 9%, wrote Goldman Sachs lead analyst Peter Appert in a note issued today.

However, GateHouse is feeling the pressure of the newspaper sector at large over sinking advertising revenue and high levels of debt. This has weighed on GateHouse shares, noted Appert, since its secondary offering. GateHouse is down 11% since mid-July, while the S&P500 fell about 7% over the same period.

GateHouse has its advantages including its local focus, which insulates the company at least partially from the worries faced by big metros. Additionally, GateHouse's revenue growth outpaces its peers.

GateHouse Media owns The Carthage Press, Neosho Daily News, Big Nickel, Neosho Post, and Greenfield Vedette in southwest Missouri.