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Journal Communications Inc. (JRN): A Media Darling?

Journal Communications (JRN) is a publishing company operating in the printing services, broadcasting and publishing segments. Its flagship newspaper is the Milwaukee Journal Sentinel, and the company owns 49 community newspapers and shoppers throughout Florida and Wisconsin. The broadcasting segment operates 35 radio stations and 11 television stations in 12 states, as well as the operation of a television station under a local marketing agreement. JRN’s Printing Services segment offers a range of commercial printing services, including printing of publications, professional journals, and documentation material.

As media transforms from print to digital, Journal Communications has shifted its focus toward broadcast enterprises, expanding its radio, television and Web offerings while reducing its print footprint. The company shed publishing operations in Louisiana and Ohio last year and similar businesses in Connecticut and Vermont will also be shed. Broadcasting makes up about 35 percent of Journal Communications’ sales. Wisconsin-based Journal Communications pays a 30-cent per share annual dividend to shareholders.

Showing signs of being affected by the downturn in the US economy, Journal Communications said earlier this week that advertising sales at its publishing business slumped 12 percent in August and total revenue fell 1.2 percent, but broadcast revenue did rise six percent. Three Wall Street analysts follow the company and have price targets for the shares ranging from $5 to $9. Competitors include Gannett Co. Inc., Belo Corp., and Lee Enterprises Inc. With about half the employees, Journal Communications has nearly twice the market capitalization of Lee Enterprises.

Shares of Journal Communications closed at $5.28 on Friday and have traded between $4.34 and $10.04 over the past 52 weeks. The company has a 12-month, trailing, price-to-earnings ratio of 7.78. Eleven percent of Journal Communications’ shares are held by company insiders with 98 institutions holding another 82 percent. Mutual fund owners include American Century, CRM, Gabelli, and Vanguard.

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