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What: Shares of newspaper publisher Gannett
So what: While a 22% jump in broadcasting revenue helped stop a multiyear string of top-line declines, continued weakness in print advertising -- down 5.1% for the quarter -- has investors questioning the USA TODAY publisher's comeback. Naturally, poor print figures don't exactly bode well for The New York Times Co.
Now what: I love investing in sectors where the secular trends are in my favor, and, quite obviously, the newspaper business just isn't one of those places. As the Internet continues to siphon away ad dollars, it's easy to see how Gannett's statistically tempting price ratios might actually turn out to be poisonous value-trap bait. Like Warren Buffett said at the 2009 Berkshire Hathaway annual meeting, "For most newspapers in the United States, we would not buy them at any price. ... I do not see anything on the horizon that sees that erosion coming to an end."
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