Despite yet another year of falling revenues, publicly traded newspaper companies saw their share prices rise sharply during 2013.

Yes, the overall market was strong -- with the S&P index up 29.5 percent and the Dow Jones up 26.5 percent.

Yes, as I and others have noted, local broadcasting is thriving with two of the next three years bringing political and Olympics advertising bonanzas and retransmission fees a continuing windfall. Gannett, E.W. Scripps and Journal Communications all benefited from their TV holdings.

And two of the seven companies may have added value by subtraction. The New York Times Co. sold the Boston Globe, and Dallas-based A.H. Belo shed the Providence Journal and Riverside Press Enterprise. Each was left with just its flagship paper and related businesses.

However, even considering those qualifiers, investors are clearly cheering up about the industry's prospects. Most of the year-to-year gains (see table) ranged from 60 percent up. And that follows good gains in 2012 when share prices rose by a quarter to a third at most of the companies.

Of course, the increases come after a sharp crash in share price during recession years. The companies are nowhere near recovering to 2005 levels when Gannett traded in the $80s, McClatchy in the low $70s and New York Times in the high $40s.

The roster of public newspaper companies was further depleted in 2012 when the Washington Post Co. (now Graham Holdings) sold the Post to Jeff Bezos and Media General completed its transition to a broadcast and digital company.

Expect two additions to the list in 2014 as News Corp. has its first full year split off from the entertainment and cable empire of its parent (now 21st Century Fox). Tribune Co.'s reorganization plans seem likely to include spinning the Los Angeles Times, Chicago Tribune and its eight newspapers into a free-standing company, most likely publicly traded.

So why the investor love for an industry that continues to shrink? I see several possible factors:

The majority of papers, though half the size in revenues they once were, continue to operate profitably. That is particularly true if you exclude the most-challenged big metros like the Globe, The Post and The Philadelphia Inquirer and if you focus just on cash flow (as investors typically do) before taking into account interest payments, pension obligations and one-time special charges.

At their low-point, newspapers were a big bankruptcy risk, which for public shareholders can mean losing everything. Indeed, there were bankruptcies (Journal Register and many privately held companies). But now it seems likely that the papers and their parent companies, perhaps shrinking still more, will survive for at least the next five years. Investors tend not to look out much further than that.

Digital advertising and other new ventures are not a runaway success, but the industry now gets higher marks for proactive exploration of new revenue streams. Most have shown solid circulation revenue gains of 5 to 10 percent as they have introduced paid digital subscriptions and increased the price for print + digital combinations.

The best of upstart digital news competitiors like The Huffington Post and BuzzFeed have attracted huge audiences. But the sector is no financial juggernaut. Recent reports peg HuffPost's 2013 ad revenues at a modest $160 million to $170 million, and parent AOL says it has chosen to reinvest in expansion rather than make a profit. 2013 was also the year that AOL acknowledged its Patch network of 900 local digital sites was not going to make it.

The new guys are in the same digital advertising boat as the legacies -- looking at formats like native and targeting advertising as alternatives to dirt-cheap banners and trying to master tricky areas of potential growth like video and mobile.

This is the end of the season for 2014 forecasts, but mine is for variations on more of the same. The biggest new wrinkle may be the digital ad giants like Google, Yahoo, Facebook and Twitter reopening initiatives to develop news and content capacity of their own. They have been and continue to be killers at drawing advertising to non-news content, but have so far done nothing special in producing news.