Newspaper stocks dead or a bargain?

October 26th, 2006 by Ian

With online news being so accessible and free, how long will companies be able to keep high circulation and ad revenues? Some say longer than most people think.

Gatehouse Media, which owns 75 local papers (and some websites) had their IPO yesterday and the share price rose 18%.
Former GE CEO, Jack Welch is eyeballing the Boston Globe, currently owned by the New York Times despite the fact that they’ve said many times prior that it is not for sale.
Morningstar says major newspaper stocks are undervalued by 30%

One thing to point out is these papers have the reputation to be able to drive traffic to their own websites. Newspaper website traffic is up and maybe some people who never bothered to read a newspaper will read it from their websites instead.