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Trinity Mirror targets Daily Express
Trinity Mirror (TNI) 97.85p
Loss to date: -2.15%
Original entry point: Buy at 100p, 1 September 2016
Newspaper publisher Trinity Mirror (TNI), owner of the Daily Mirror, has offered a salutary reminder that a cheap stock can get cheaper without a catalyst to change the market’s view.
Trading at 100p when we flagged it in autumn 2016, the shares have been volatile in the interim period but have recently firmed after a pre-Christmas trading update (16 Dec) revealed advertising revenue fell less than expected in the last quarter of the year. Net debt at £35m was also significantly better than anticipated.
The company has now confirmed it is in talks to acquire a minority stake in a new company that plans to buy some assets from Richard Desmond’s Northern & Shell media business.
Reports suggest the new company will be headed by former News of the World editor David Montgomery and will buy Desmond’s publish arm which includes the Daily Express and OK! Magazine.
Trinity has proved effective at stripping out costs from its newspaper operations and could potentially make savings by merging back office and sales operations across both the titles in play and its own existing assets.
We believe Trinity’s shares are very cheap and offer considerable upside potential. (TS)