For newspaper stocks, 2010 was a sideways year

After dramatic drops in 2006, 2007 and 2008 and a rally from the depths in 2009, share prices for publicly-traded newspaper companies steadied out in 2010.

By my tally of the year-end close numbers posted last Friday, five of the nine remaining public companies posted gains, three had further share declines and one — the Washington Post Co. — was virtually identical to its 2009 close. (See chart below.)

Newspaper Stock Prices, 2010
Company
Name
12/31/10
Price per share
12/31/09
Price per share
A.H. Belo $8.70 $5.76
Gannett $15.09 $14.85
Journal Communications $5.05 $3.89
Lee Enterprises $2.46 $3.47
McClatchy $4.67 $3.54
Media General $5.78 $7.84
New York Times $9.80 $12.36
E.W. Scripps $10.15 $6.96
Washington Post $439.50 $439.60
Source: Yahoo! Finance

The two strongest gainers were A.H. Belo and E.W. Scripps, both spun out as new debt-free companies in 2008. McClatchy, Gannett and Journal Communications all posted modest gains.

The three companies closing lower in 2010 than 2009 were Lee Enterprises, Media General and the New York Times Co.

Viewed with a longer lens, all the companies except Scripps and A.H. Belo are way down from their mid-decade peaks.

Gannett trades at a quarter of its January 2006 five-year high of $64.28. McClatchy and Lee are now worth less than a tenth of their peak valuation during the five-year period. New York Times ended the year at about one-third its five-year high of $28.66 in February 2006.

Washington Post was both stable for the year and comparatively strong for the five years, falling only about 45 percent from an August 2007 peak of $792.75.

That reflects the company’s diversification with the growing Kaplan education business and highly profitable local broadcasting and cable divisions, off-setting break even at the Washington Post itself (and losses at Newsweek, now sold).

As I noted in a mid-November post, 2010 turned into a financially disappointing  year for the industry. Advertising revenues stopped falling as fast as they had in 2009 but never turned positive year-to-year. Print circulation continues to fall and newsprint prices have kicked up significantly.

Still, share prices are typically a reflection of what Wall Street sees in the near future. The year-end prices indicate confidence that the companies are solidly profitable, with reasonable prospects of turning around traditional revenues and growing new ones in 2011.

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