A rally in shares of Torstar  comes as no surprise to Canadian money manager John Zechner, who told BNN shares of the company are “stupid cheap” and could double in the near-term.

Shares of the Toronto media company surged more than ten per cent in early trading on Friday. Last month, shares of the company that publishes the Toronto Star newspaper as well as the Metroland group of free regional newspapers touched an all-time low of $1.47 per share.

At that level the company had a market valuation of about between $130-$150 million dollars – even less when you consider the company has more than $70 million in cash, said Zechner, chairman and chief executive officer of J. Zechner Associates.

The valuation doesn’t make sense considering the company paid $200 million for a majority stake in VerticalScope Inc., a Toronto-based digital media company that operates hobbyist and niche-interest websites, he said. “You’re saying the company is worth half what it paid for an acquisition last summer - giving nothing in value for The Star, for Metroland - for the move to digital?”

Torstar still faces difficult challenges. In its most recent quarter, the company reported a $235.5-million loss and wrote down the value of its newspaper assets. The company also acknowledged it spent $14 million on its Star Touch tablet app and will spend another $10-million this year before breaking even on the platform sometime in 2017.

Even with those issues, the stock is good value, according to Zechner.

“Management is screwed up, the business has been slow – there are problems,” he said. “You could easily see a $300-million valuation which would be (nearly) double from here. I think it’s a no-brainer.”