Remain Wary of Newspaper Stocks

The news about newspapers just keeps getting worse and worse. The Newspaper Association of America reports that newspaper ad revenue fell nearly $2 billion in the third quarter -- a record 18.1 percent decline.

It was all the expected culprits: newspapers' biggest category, retail, suffered an 11.7 percent drop. Classified ads dropped 30.9 percent, much of those ads likely moving online to the likes of Craigslist. And while local ads have suffered the most, even national ads took a hit-- that category down 18.4 percent in the quarter.

Newspapers are counting on online ads to be their future, but even that great white hope disappointed this past quarter. Online newspaper ads dropped 3 percent in the third quarter after falling 2.4 percent in the second quarter.

Newspaper stocks have been suffering -- all down far more than the Dow year-to-date. Of all the major newspaper players, Gannett (GCI) is suffering the most, year-to-date, down more than 80 percent at one point last month, and now down more than 75 percent. News Corp's (NWS) exposure to publishing through its acquisition of Dow Jones last year hasn't helped it any. NWS is now trading down just over 60 percent year-to-date. The historic New York Times (NYT) company's stock is off nearly 60 percent year-to-date and the Washington Post Company (WPO) (which also owns web sites like Slate.com and test prep services) is off closer to 50 percent year-to-date.

Do these huge declines mean any of these newspaper stocks are a buy? Sure they've got content. But there's good reason to be wary when their best hope for a future business model -- online ads -- are on the decline.

Comments

[billp37:]

"Newspapers don't report the news. Newspapers shape the news." John Gowan, Libertad, Albuquerque, NM.

If we had to rely on New Mexico newspaper in our 16 year legal project, then our project would fail.

Internet visibility may make our legal project succeed.

National Credit Union Administration Inspector General office to begin investigation of theft of our $22,036 from our saving accounts at Sandia National Laboratory Federal Credit Union on Thursday afternoon.

www.prosefights.org/nm...


"Do not fear the enemy, for your enemy can only take your life. It is far better that you fear the media, for they will steal your HONOR. That awful power, the public opinion of a nation, is created in America by a horde of ignorant, self-complacent simpletons who failed at ditching and shoemaking and fetched up in journalism on their way to the poorhouse."

Mark Twain

2008 Dec 03 09:28 AM