PHILADELPHIA -- Private Capital Management LP, the Legg Mason Inc. subsidiary that pressured newspaper publisher Knight Ridder Inc. into seeking a buyer, has trimmed its holdings in Knight Ridder and eight other national newspaper chains.
Newspaper holdings by the Naples, Fla., company have dropped from 16 percent of the company's portfolio in late 2004 and early 2005 to 13.8 percent as of Dec. 31, according to PCM's quarterly filing with the Securities and Exchange Commission this week.
PCM reduced its investment in Knight Ridder Inc. from 12.9 million shares as of Sept. 30 to 12.4 million shares as of Dec. 31, according to its quarterly report. It was the second-straight quarter in which PCM's Knight Ridder holdings dropped.
In previous filings, PCM attributed some of the Knight Ridder sales to requests by clients to cash in their shares, and not to a change in chief executive Bruce S. Sherman's investment strategy. Sherman has asked investors to be patient with newspaper stocks, which dropped last year as publishers faced higher newsprint costs and sluggish advertising sales.
Also in the fourth quarter, PCM reduced its Gannett Co. holdings to 15.9 million shares from 16.7 million; New York Times Co. to 20.7 million shares from 21.7 million; and Journal Register Co. to 4.1 million from 4.9 million. The investment firm also cut its stakes in Belo Corp., Lee Enterprises, McClatchy Co., Media General Inc. and Tribune Co., owner of The Sun.
During the fourth quarter, overall Private Capital assets fell to $27.9 billion from $29.9 billion three months earlier. A spokesman for the firm said he could not comment.
Some investment firms typically sell shares in the fourth quarter to help clients cover taxes or rebalance portfolios when stock prices drop.
But PCM's reduction in newspaper stocks outpaced the overall shrinkage of its investment portfolio.