Newspaper stocks are generally shunned by today's investors. Moats are shrinking as advertising moves online, and yet capital structures are often levered (a consequence of the decades of industry stability). But it is among the most-hated industry groups that some of the best bargains can be found.
Torstar (OTC:TORSF) owns a number of newspaper assets, including its flagship Toronto Star, along with a smaller book publishing segment. The circulation numbers for the company's newspapers (including that of The Star) often dwarf those of the competition, which helps explain the company's strong returns on capital, despite the industry's secular troubles (click to enlarge):
As Warren Buffett has indicated with both his words and his actions, newspapers...
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