GTN

Gray Media ($GTN) CFO Bucks Executive Selling Trend with $46K Purchase at Current Levels

06/09/2025 17:33

Gray Media Inc. ($GTN) CFO Jeffrey Gignac purchased 12,500 shares at $3.68 per share on June 5, investing approximately $46,000 in a move that contrasts sharply with a series of executive sales over the past six months. Atlanta-based Gray Media, founded in 1891, stands as one of America's leading local broadcasting companies, operating television stations nationwide while delivering local news and entertainment content. Beyond traditional broadcasting, the company has expanded into digital marketing services through Gray Digital Media and video production, employing approximately 9,118 full-time staff. The company competes with industry peers including Nexstar Media Group, Sinclair Broadcasting, and TEGNA Inc. Recent insider activity had been dominated by selling pressure from senior executives. CEO Kevin Latek sold 155,124 shares at $4.37 per share on December 2, 2024, netting approximately $678,000. Director Paul McTear followed with a sale of 17,780 shares at $3.77 on December 16, while Director Richard Lee Boger disposed of 16,000 shares at $3.85 on February 28, 2025. These transactions occurred during the stock's declining phase, raising investor concerns about management confidence. Stock performance data reveals $GTN's challenging trajectory, beginning at $5.91 in June 2024 and declining approximately 50% to $2.91 by year-end. The stock showed temporary recovery in early 2025, reaching $5.19 in mid-March before retreating to current levels around $3.68. This weakness reflects both industry-wide broadcasting challenges and company-specific financial burdens. Gray Media's primary financial challenge centers on elevated leverage ratios. The company maintains a debt-to-equity ratio of 196.8%, carrying approximately $5.71 billion in total debt against shareholders' equity. The current ratio of 0.91 falls below the ideal threshold of 1.0, indicating potential short-term liquidity constraints. However, strong operational cash generation of $815 million annually and levered free cash flow of $693 million demonstrate solid debt servicing capabilities. Operational metrics remain healthy despite top-line pressures. Trailing twelve-month revenue reached $3.6 billion with net income of $226 million, maintaining operating margins of 11.51% and net margins of 7.72%. EBITDA of $1.1 billion reflects robust cash generation capabilities. However, recent quarterly revenue declined 5% year-over-year, indicating structural headwinds from advertising market shifts and cord-cutting trends. Valuation metrics suggest significant market discounting. The stock trades at a trailing P/E ratio of 1.67x, price-to-sales ratio of 0.10x, and price-to-book ratio of 0.56x—all substantially below industry averages. Enterprise value-to-EBITDA multiple of 5.88x compares favorably to typical broadcasting multiples of 7-10x, potentially indicating undervaluation despite leverage concerns. Gignac's purchase carries particular significance in this context. While other executives sold during the stock's decline, the CFO's direct investment at current price levels signals potential confidence in the company's intrinsic value and future prospects. The $3.68 purchase price aligns closely with current trading levels, suggesting management views current valuation as fair or potentially undervalued. The broadcasting industry faces secular challenges from streaming service proliferation and evolving advertising landscapes. However, Gray Media maintains advantages as a local broadcaster with stable viewership bases and expanding digital marketing capabilities. The company's early 2025 rebranding from Gray Television to Gray Media signals strategic evolution toward multimedia operations beyond traditional broadcasting. Investors should note the attractive dividend profile, with an 8.4% yield supported by a conservative 13.68% payout ratio, indicating sustainability despite current challenges. Institutional ownership of 75.6% reflects sophisticated investor confidence despite leverage concerns. Upcoming catalysts include second-quarter earnings scheduled for August 6-11, where advertising market recovery, digital business performance, and debt management strategies will be key focus areas. Industry consolidation possibilities and 5G technology opportunities may also influence future performance trajectories.

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