Introducing Small Cap, Micro Cap Investor Warren Buffett

With our small cap focus, it’s not often we get the opportunity to write about Warren Buffett, the so-call “Oracle of Omaha,” one of the nation’s richest men and one of the most closely-watched investors in the world. Buffett typically takes big stakes in well-known, large cap companies and can move markets with his investment picks.

Warren Buffett photo courtesy of Google Images

So we’ll gladly jump at the chance to take note of two of Buffett’s recent investments, both in the realm of small town, local journalism. Buffett, the CEO of Berkshire Hathaway (BRK.B) bought a 3 percent stake in the micro-cap Lee Enterprises (NYSE: LEE), according to Real Money (http://www.thestreet.com/story/11585795/1/buffett-gobbles-small-town-newspapers.html?puc=_mdb_html_pla2&cm_ven=EMAIL_mdb_html).  A month ago, Buffett agreed to loan Media General (NYSE: MEG), $445 million in exchange for a 19.9 percent equity stake in the company, according to the report. He also bought 63 of Media General’s newspapers for $142 million.

Buffett’s purchases are part of his oft-stated belief in the value of local, small town newspapers and small town journalism. Buffet is betting that the demand for local news like sports, weddings and other local affairs has staying power, according to the Real Money story, which notes that over time these investments could turn out to be two more to add to Buffett’s incredible run of great choices.

Richmond, VA-based Media General Inc. (http://www.media-general.com) owns more than 200 newspapers, 18 network-affiliated television stations and various websites around the country. MEG was founded in 1850 and today has strategic partnerships with Yahoo and Zillow. It also owns and operates Blackdot, Dealtaker.com and NetInformer, among various other holdings. Its 52-week trading range is $1.14-$6.84 and its market cap is about $90 million. Buffett’s equity stake has certainly helped MEG in recent weeks. The day his investment was announced MEG stock jumped about 33 percent. It close June 18 at $3,84, down 8 cents for the day.

Davenport, IA-based Lee Enterprises (http://www.lee.net) “publishes 52 daily and 39 Sunday newspapers, 300 weekly newspapers and niche publications in 23 states,” Real Money reports. The company, founded in 1890, also “provides digital infrastructure and digital publishing services for about 1,500 newspapers.” LEE’s 52-week trading range is $0.49-$1.73 and its market cap is $68 million. It closed June 19 at $1.31, down 6 cents for the day.

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