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A securities analyst who goes by the name Ugly Duckling wrote for Seeking Alpha June 11 that stock of Tribune Publishing, which in May bought the Union-Tribune, could go up while stock of New York Times goes down.

Both companies are in the same business but took completely different routes to growth, writes the analyst. The Times company sold most businesses except its flagship paper, the international edition, and online assets.

Tribune Publishing owns a number of large papers and is buying more.

(The Times is concentrated in the largest U.S. market, New York, with a population of 20.1 million. Tribune Publishing dominates the second- and third-largest markets, Los Angeles and Chicago, with a combined population of almost 23 million, and operates in other markets such as San Diego, Orlando, and Baltimore.)

Both metro daily newspaper companies, however, paint a "bleak picture," says the author.

The bottom line is valuation. The Times sells for 1.4 times sales and Tribune Publishing only 0.2 times sales. The Times's dividend yield is 1.2 percent and is in danger, while Tribune Publishing's yield is 4.6 percent. Ugly Duckling says he would short Times stock (bet it will go down) and buy Trib Publishing stock, although he doesn't say why he would buy any stock with a "bleak picture."

Defying Ugly Ducklng, Trib Publishing stock closed down 1.95 percent today (June 15) while Times stock dropped 0.36 percent.

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Comments

Visduh June 15, 2015 @ 8:02 p.m.

No matter the condition of an industry or the fundamentals of a particular stock, not the overall market condition, there is always some pundit out there proclaiming that his pet stock has massive upside potential. Barron's, the weekly cousin of the Wall Street Journal, has such recommendations every issue. Yep, whether the market is up or down, they can find someone to tout a stock as being undervalued by as much as two-thirds. This comes across as just about the same thing.

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Don Bauder June 16, 2015 @ 6:23 a.m.

Visduh: One who is in the business of selling stocks will find something to buy, even in the worst of bear markets. Ditto for those analysts who make recommendations on stocks: they will always find reasons to buy. Consider: how often do you see a sell recommendation from an analyst? Best, Don Bauder

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Ponzi June 15, 2015 @ 8:46 p.m.

I follow the stock market everyday. It's hard to "pick stocks." I follow StockTwits, The Street and other channels of news. Seeking Alpha has lots of writers who publish short and long thesis opinions. Some are good, some are poorly researched, but all have a bias.

I appreciate the contributors that have strong skills in reading financial statements. Because that is where all the bones are buried. In the footnotes, off statement deals and other disclosures. Wall Street is like the ocean, there are plenty of fish in the sea. I shy from legacy stock like newspapers because there are too many more promising stocks that have more upside potential. Print news must transform their business models to online, paid subscriber content, and still address regional news concerns. That's a high order and it looks like The Tribune is aiming for that. But until they have the scale and moat that other subscription services like iTunes (well captive download), NetFlix and so forth, they will be on my avoid dinosaur stock list. So is Tribune a growth stock or income stock? I say neither.

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Don Bauder June 16, 2015 @ 6:28 a.m.

Ponzi: Some would consider Tribune Publishing an income stock, because of its high dividend. But how long will that dividend last? New York Times once had a fairly fat dividend.

The stock market has been basically flat this year. There may be a correction ahead. But I still say blue chip stocks with good dividend yields remain the best investment around. Best, Don Bauder

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Twister June 16, 2015 @ 5:06 p.m.

There are some signs that Beutner is taking his job seriously, insofar as he seems to really want to provide some good ol' fashioned reporting. Whether or not he can forge a money-machine out of that is another matter. I hope I am not sliding into LA-la land likewise remains to be seen.

A good, well-researched, well-written, well-referenced piece on Beutner and the whole related backstory would be priceless, mirroring a tradition for the Reader to aspire.

Both entities, however, need to fundamentally re-think their business-plans. My plan would have killed advertising and gone to the core of commerce, but I was a damned fool who didn't know how disingenuous, to what extremes of dissimulation, the bright, young, masters of programming could sink.

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Don Bauder June 16, 2015 @ 9:40 p.m.

Twister: Don't get too bullish on Beutner. He may not be as wonderful as people think. Watch future stories. Best, Don Bauder

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Twister June 24, 2015 @ 8:10 p.m.

A good, well-researched, well-written, well-referenced piece on Beutner and the whole related backstory would be priceless, mirroring a tradition for the Reader to aspire.

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