TheStreet.com Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking total return performance. We asked the team to study the newspaper sector to discern the three best -- and three worst -- stocks in the sector. Their analysis follows.

THREE BEST

Daily Journal ( DJCO): No debt and an ROE of 20.19% helped this small cap rise 30.33% over the past year. It also has an operating margin of a whopping 29.36%.

E.W. Scripps ( SSP): Bad revenue growth, but the stock has only fallen 3.36% over the past year. It also looks cheap with a price-to-book ratio of .92. The company is also decreasing its debt load.

Washington Post ( WPO): Quarterly revenue growth of 2%, decreasing debt, and a loss of 16% in its stock price year-to-date, which is actually better than average, make this stock more attractive than most publishers. Most of the company's revenue comes from its broadcast division and from Kaplan, insulating it from most of the weakness in the newspaper game.

THREE WORST

Lee Enterprises ( LEE): With an amazingly bad ROE of -142.67% and mountains of debt, Lee is slowly drowning. It has a debt to equity ratio of 20.34. Yikes.

New York Times ( NYT): Revenue growth of -21.2% over the last year and a high price-to-book ratio of 2.3 make this stock unattractive. Investors have lost more than 44% over the past year.

Journal Communications ( JRN): Journal is down 56% over the past 2 years and has a pitiful ROE of -68.5%. No earnings and a fairly heavy debt load are making this stock look like a terrible bet.
Prior to joining TheStreet.com Ratings, David MacDougall was an analyst at Cambridge Associates, an investment consulting firm, where he worked with private equity and venture capital funds. He graduated cum laude from Northeastern University with a bachelor's degree in finance and is a Level III CFA candidate.