BOSTON ( TheStreet) -- Journalism is undergoing a pronounced contraction.

Newspapers across the country are struggling to return to profitability, laying off thousands of career writers in the process. Yet, at Daily Journal ( DJCO), business is booming. The Los Angeles-based publisher, which has a market value of just $94 million, is thriving. The company achieved earnings growth in every quarter of 2009. How is this anomalous performance possible? Daily Journal targets a niche audience.

Each of Daily Journal's 13 newspapers provides general-interest news and in-depth coverage of one particular area -- usually, the law. By targeting professional audiences and covering news that they deem pertinent, the company differentiates itself from broadly focused peers. Its publications include: California Lawyer, California Real Estate Journal, San Diego Commerce and the San Francisco Daily Journal. In total, the company distributes 16 recurring publications.

This strategy, while sensible, continues to elude old-school peers. During the past three years, Daily Journal has increased revenue 8% annually, on average, and boosted net income 49% a year. Its 22% net margin is shockingly high, matching that of tech-favorite Apple ( AAPL). Perhaps Rupert Murdoch, head of News Corp. ( NWS), should send a team to California to dissect Daily Journal's strategy. His newspaper segment's operating income plummeted 81% in the latest quarter.

Daily Journal's fourth-quarter net income increased 15% to $2.3 million, and earnings per share climbed 20% to $1.62, though revenue declined 4% to $10 million. This pint-sized publisher has an immaculate balance sheet, with $62 million of cash and marketable securities and no debt. We give Daily Journal a financial-strength score of 7.1 (out of 10) and a performance score of 9.1. Its stock has soared 90% during the past year and has returned 12% since it was first recommended in "Under the Radar" by David MacDougall.

The big risks for this company aren't in its business, but its stock. Daily Journal has a float around 1.4 million shares and daily trading volume under 1,000. That means the stock is extremely illiquid. But its price tag is attractive. The shares are significantly cheaper than those of media peers based on trailing earnings, projected earnings, book value and sales. This is a true under-the-radar pick as Daily Journal is an unknown on Wall Street. We rate Daily Journal "buy."

-- Reported by Jake Lynch in Boston.