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Lee Enterprises up 20 Percent on Positive Seeking Alpha Article

Shares of Lee Enterprises (NYSE: LEE) were up 20 percent after an article published on Seeking Alpha called it “grossly undervalued.”

Lee Enterprises is a publisher of locally based newspapers and websites that report local news to small geographical areas.

In the article, the author said that because its reader-base is often older and less inclined to embrace the newest technology, the company has better reader retention. Gannett, for example, lost subscribers at a rate of 6.87 percent compared to Lee that only lost an annualized 4.46 percent.

The author said,

According to my valuation, I have derived a value of $3.09 per share vs. a $1.67 market price (as of 14th June 2013). That is almost an 85% rise if the market price were to be corrected. The current undervaluation, I believe, is largely due to: a) the large debt position of Lee enterprises b) the current circumstances of the newspaper industry c) the poor US economy, being priced into the stock.

Others commented that the valuation should be closer to $5 per share based on other metrics.

Disclosure: At the time of this writing, the author had no position in the companies mentioned.

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