Berkshire Hathaway Inc. BRK.B announced that it is going to buy some small Oklahoma newspapers near Tulsa. The company’s share price has however declined post-announcement owing to broader market fundamentals.
The terms of the deal, which include the buyouts of The Broken Arrow Ledger, The Sand Springs Leader, The Coweta American, The Wagoner Tribune, The Owasso Reporter and the Skiatook Journal, were undisclosed.
According to media reports, Berkshire Hathaway has already acquired six weekly newspapers, the daily Tulsa Business, and Legal News from Community Publishers Inc. Berkshire’s media business portfolio includes Business Wire, The Washington Post Co., The Buffalo News and BH Media Group, Inc.
In 2009, Warren Buffett, the chairman and CEO of Berkshire Hathaway, stated that he was not very keen on investing in the newspaper industry. However, Buffett has since then changed his mind, adding a number of newspaper companies to its print media business.
In Nov 2011, Buffett announced the purchase of The Omaha World-Herald Company, the publisher of Nebraska’s principal daily newspaper, for $200 million. The deal added the World-Herald and six other daily newspapers and several weekly newspapers to the company’s media business portfolio.
In 2012, Berkshire bought 63 Media General newspapers for $142 million. It also bought the Manassas News & Messenger, a Virginia newspaper, by the end of 2012.
In 2013, the company announced that it will buy Roanoke Times from Virginia’s Landmark Media Enterprises. Roanoke Times is a closely held newspaper company with daily sale of 76,000.
The recent buyout is an addition to its consistently growing group of more than two dozen small and medium-sized newspapers. Moreover, this deal is expected to boost the company’s existing publication business – Tulsa World.
The company’s strategy of expanding its newspaper business shows its confidence in the industry. Berkshire Hathaway’s newspaper unit presently consists of 58 small or medium-sized dailies.
Currently, Berkshire Hathaway sports a Zacks Rank #1(Strong Buy).
Other Stocks to Consider
Other stocks in the property and casualty insurance industry having the same Zacks Rank as Berkshire Hathaway are Aspen Insurance Holdings Ltd. AHL, AXIS Capital Holdings Limited AXS and HCC Insurance Holdings Inc. HCC.
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