VCI - Valassis Communications Inc.

[LowIQinvestor]

Anyone have a good thesis on why Ted Weschler had a large position in this? What is the moat?

 

They just surfaced in my research on large company buybacks and the current valuation looks intriguing.  At an 8 PE it caught my attention and wanted to see if anyone is a shareholder or done any work on it.

 

Thanks

[watsa_is_a_randian_hero]

Its a cash cow (albeit a slowly dying cash cow).  I owned the bonds a while back.  They were due to get some huge cash settlement that was going to reduce net debt significantly.

The bonds were junk bonds when I bought them; but they got an upgrade after they received that cash settlement a few years ago.  That combined with the market rallying led the yields to come in significantly on it.  I think it eventually was called. 

 

I've still followed the equity on it, but have never bought.  Would want it cheaper.

 

 

[twacowfca]

Its a cash cow (albeit a slowly dying cash cow).  I owned the bonds a while back.  They were due to get some huge cash settlement that was going to reduce net debt significantly.

The bonds were junk bonds when I bought them; but they got an upgrade after they received that cash settlement a few years ago.  That combined with the market rallying led the yields to come in significantly on it.  I think it eventually was called. 

 

I've still followed the equity on it, but have never bought.  Would want it cheaper.

 

We've advertised off and on with them over the years.  Their core business has been coupon inserts in  newspapers similar mass print media.  It has been a cash cow, but likely giving less milk with digital competition.  How have they done in recent years?  They are probably worth a close look with Ted's interest.  Has he bought them for BRK?  If so how much?  What does he see that others don't?

[Hubris]

High amortization expenses so the 8 P/E your looking at isn't anywhere near FCF... 5% dividend yield and aggressive buybacks. I personally think the dividend is stupid given the valuation they should have just stuck with the buyback.

 

Their business is mainly driven by shared mail... They are also trying to grow the digital business in order to sell combined solutions.

[LowIQinvestor]

http://www.bloomberg.com/news/2013-12-18/valassis-will-be-acquired-by-harland-clarke-for-1-84-billion.html?cmpid=yhoo

 

Valassis acquired