New York Times: It's Cheap for Good Reason

In the world of small-cap investing, it's often difficult to pass up familiar names. It's an emotional tendency to think, Why buy some stock we've never heard of when we can pick up shares of a product we know and love?

I have to admit that the recent decline in shares of New York Times (NYT) generated an immediate hope that it might be time to turn bullish on the publisher.

Didn't we know that the publishing sector was bad last summer? Didn't we know that newspaper fundamentals were weak when New York Times was trading at $25? Didn't Warren Buffett do well by buying a large stake in Washington Post (WPO)? Doesn't the New York Times fit in the best-of-breed category?

The answer to each of these is a "yes" -- followed immediately by a "but." ...