These New CEOs Are Doing Their Jobs Right

AnnaLisa is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

It has been a great couple of years for new CEOs at Campbell Soup (NYSE: CPB), Yahoo! (NASDAQ: YHOO), and Gannett (NYSE: GCI). Denise Morrison, Marissa Mayer, and Gracia Martore, respectively, have seen their companies' share prices appreciate.

Denise Morrison has helped Campbell's share price move 38% this last year. Marissa Mayer has overseen the turnaround of fairly moribund Yahoo!, moving the stock up 73%, and Gannett's Gracia Mattore may be the biggest miracle worker of all with Gannett's stock up 81%, making money in newspapers in a digital age.

Is it something about these three women or is it their companies? These companies were all challenged. Campbell was seen as primarily a soup company and its products as old-fashioned. Yahoo! had five CEOs in as many years. Gannett owned newspapers, of all things, yet the company has expanded with digital and broadcasting divisions.

Still mmm, mmm good?

Campbell Soup's brands were more ho-hum than mmm, mmm good, but since Morrison came on board, the V-8 brand was livened up with Frusion and Smoothie drinks rapidly gaining share and grocery shelf space, and further expanding into the energy drink space by adding green tea to V-8 Fusion.

Every six months, the YouGov BrandIndex creates a composite score of thousands of brands that have the most positive buzz. V-8 was the number one food and beverage brand out of 100, the second year in a row.

The company acquired Bolthouse Farms brand of fresh cut veggies and juices, gaining an entry into the Packaged Fresh category of shelf space. This added to its debt load (total debt is now over $4 billion to total cash of $457 million) but was a needed initiative.

On two separate analysts' days, Morrison laid out a master plan: attracting millennials with soups to go, more ethnic soups and dinner sauces, more gourmet flavors in the Pepperidge Farms snacks suited for an adult sweet tooth. Also, the slow cooker phenomenon (80% of U.S. households have one) hasn't slipped by Morrison with another product line for Campbell's sauces.

Global and social media were two important areas Morrison said the company will address. You may think the red and white soup can immortalized by Andy Warhol couldn't be more American, but Campbell Soup is going global in a big way with a presence in 120 countries. The International division offers 20 brands of soups, sauces, and snacks moving in on rival Mondelez's territory.

Campbell Soup is trading at a trailing P/E of 19.56 with a forward P/E of 16.59, but the PEG is getting stretched at 2.88. Analysts give the name only single digit five year growth estimates of 6.08%. However, this company has a strong insider hold at 43% with Morrison herself owning 447,943 shares as of November. The stock has a 2.60% yield at a 49% payout ratio.

The new Steve Jobs?

Marissa Mayer's first anniversary as Yahoo! CEO is coming up and some are calling her the new Steve Jobs. Those are some pretty big shoes to fill. Mayer has already made her mark, however, going on a shopping spree to monetize Yahoo! Since last July, she's bought Summly, Tumblr, gaming company PlayerScale, and video chat team On the Air, and Flickr, the photo sharing service that competes with Facebook's Instagram.

Buying Flickr and Tumblr was really a coup for Yahoo! as both woo the youth demographic. Google and Yahoo! compete for ad dollars against Facebook. Tumblr alone could bring in 200 million new unique users to Yahoo!. Yahoo!'s and Mayer's biggest challenge is attracting search and display ads and that require a base of 18-35 year old users to attract advertisers.

On the content front, Yahoo! is creating original video programming with a new lineup of five original shows starring popular actors like Ed Helms and John Stamos. There will be some stiff competition here against Netflix and Amazon, with Netflix having first mover advantage.

The stock is still trading at only a 7.90 trailing P/E despite its run. The profit margin is an astounding 82.55% and its debt is only $36 million to $3 billion in total cash. Price/book is now at 2.07. 

Analysts like the name with Goldman Sachs, Citigroup, and Needham & Company all giving $30-$31 price targets and Buy ratings.

Not just newspapers anymore

CEO Gracia Martore's Gannett has had the best share price appreciation of the three. The stock trades at a reasonable trailing P/E of 13.64 with a 3.10% yield at a 44% payout ratio. In 2012, it raised the yield by 150%.

Gannett is trading at 52-week highs. Analysts are mostly bullish with two Strong Buys, four Buys, three Holds and one Underperform. However, they believe five year EPS growth will slow to 8.00%. Another caveat: short interest has been growing to 9.50%, high for a media conglomerate.

Newspapers like USA Today, 82 dailies, and hundreds of weeklies and special interest publications are part of the Publishing segment, but the company also has a Digital division which runs special interest websites like Career Builder, a Monster Worldwide competitor, and its Broadcasting segment owns 23 TV stations. Gannett will grow to 43 stations when its acquisition of Belo, announced last week, closes for a total of $2.2 billion including assumption of debt.

Gannett's press release says the immediately accretive mega-deal will, "..create a broadcast “Super Group,” catapulting Gannett into the nation’s fourth-largest owner of major network affiliates reaching nearly a third of all U.S. households." Martore said it would also improve cash flow and help pay down debt.

Last year, the company had $5 billion in total revenue and also announced it would buy back $300 million worth of shares. In the 2012 Letter to Shareholders, Martore wrote, "For the first time in years, Gannett is playing offense, taking strategic steps to shape our future."

The Foolish takeaway

All three CEOs are turning around their companies, facing challenges they inherited to great success for shareholders. Gannett is the most shareholder friendly, but Yahoo! is the growth name. As for Campbell Soup, I'd like to see it pay down that debt, but the future of these companies are looking brighter than ever after some housecleaning.

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AnnaLisa Kraft has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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