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Buffett's Secret Stock From Q1 Filing Revealed


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Warren Buffett's Berkshire Hathaway (BRK.A)(BRK.B) held over 1.6 million shares of Lee Enterprises (LEE), about 3.2 percent of its outstanding shares, as of March 31, according to a filing with SEC late today. On that date the stake was worth $2.1 million. The total market value of the company is around $60 million.

 

The Lee stake is tiny by Berkshire standards, but it's particularly interesting because Buffett's company had wanted to keep it secret.

 

http://www.gurufocus.com/news/179020/buffetts-secret-stock-from-q1-filing-revealed

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This was known already, I think he got the shares in the reestructuring. LEE is a very interesting company and has managed to defend revenues and increase their internet business better that their peers in big cities. Lots of debt though, that is why I think Buffett bought higher in the capital structure.

 

 

http://online.wsj.com/article/SB10001424052702303624004577338070658967732.html

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Yeah, I kinda saw that and posted it here quickly, and then realized it probably wasn't much of a big deal after all.. But we can't delete our own threads anymore, so I couldn't remove it.

 

but to make up for it, here's a video of a 40+ min interview with Buffett:

 

http://www.cornerofberkshireandfairfax.ca/forum/berkshire-hathaway/43-min-interview-with-buffett-at-economic-club-of-washington-d-c-(video)/

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Watching it at the moment... thanks!

 

I just finished it and loved it, but I always love Buffett interviews (especially when that CNBC Joe guy isn't always screaming stupidities).

 

Thanks for posting.  WEB was in great form in that one.

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Great Buffett video.  Thanks for sharing.

 

It won't surprise the readers of this forum, but the question at the end about Berkshire's price was nice and direct.

 

Q:  "Berkshire Hathaway, today is it a buy?"

 

A:  "Well, the businesses it owns are worth more than the current price . . . "

 

He couldn't quite bring himself to say yes directly.

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  • 2 months later...

Warren Buffett increases stake in Lee Enterprises

Thursday, August 16, 2012 01:52:00 PM

 

 

Aug. 16--Warren Buffett's Berkshire Hathaway Inc. has nearly doubled its stake in newspaper publisher Lee Enterprises, the parent company of the St. Louis Post-Dispatch.

 

Lee's shares jumped nearly 20 percent on the news Wednesday, closing at $1.59, up 26 cents.

 

In a filing with the Securities and Exchange Commission Tuesday, Omaha-based Berkshire Hathaway, disclosed that its stake in Lee Enterprises has grown to 3.23 million shares, about 6 percent of shares outstanding. In June, Berkshire's ownership stake in Lee totaled 1.7 million shares, according to regulatory filings.

 

Buffett, who three years ago said he wouldn't touch a newspaper stock, has recently has been beefing up his investments in them. The famed value investor favors small-city newspapers that he feels have deep ties to their communities and more limited competition.

 

Except for the Post-Dispatch, all of Lee's 52 newspapers are in small cities and towns.

 

Newspapers are selling at a third of the price of a few years ago, depressed by continuing declines in print advertising and circulation. But newspapers still turn out operating profits equaling 10 percent or more of revenues, notes long time newspaper industry analyst John Morton. "There are industries that never expect 10 percent margins in the best of times, and newspapers are doing it in their worse times," he said.

 

That combination of low stock prices and respectable margins are what attracts Buffett, says Morton. Lee Enterprise's operating margin is 14 percent, according to a recent SEC filing.

 

Would Buffett like to own Lee? "It wouldn't surprise me," said Morton.

 

Lee spokesman Dan Hayes says Buffett has not contacted management nor made a purchase offer. "Warren Buffett is a very welcome investor," he said.

 

Buffett's stake in Lee stock is worth about $5.1 million, which is small potatoes to Buffett and his company. Last November, he bought $85 million of Lee debt, paying 65 cents on the dollar, according to a Wall Street Journal report.

 

Lee has been paying down $926 million in debt, most of it taken on in its 2005 purchase of Pulitzer Inc., which included the Post-Dispatch. The stock price has fallen from the $45 range in 2005 to $1.59 on Wednesday.

 

The company refinanced its debt through a "pre-packaged" bankruptcy filing last winter, in which its shareholders retained 87 percent of company stock. The company lost $13.3 million through the first nine months of its fiscal year, compared to a $140 million loss a year earlier.

 

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