In the last year, newspaper and publishing stocks in the S&P 500 are down 9%, versus a 7% gain for the broader index. The selloff has left some print media giants with historically cheap valuations. Still, it’s not easy being a bull on this sector.

“The last three years have not been fun,” says Miles Groves, an economist and consultant to the newspaper business. Groves, who also publishes monthly and quarterly research, cites disappointing advertising results, sagging circulation stats and challenges ahead as readers devote more attention to bloggers, while media buyers send more dollars to the likes of Google and Yahoo!.

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Over the past 12 months, printing and publishing stocks in the S&P 500 have trounced the broader index by 37 points. Despite the runup, some stocks in the sector may still be attractive.

Take Dow Jones (nyse: DJ – news – people ), the financial news and information publisher. Its shares are down 33% from a 52-week high and have barely kept up with the broader market on a latest 12-month basis.

Dow Jones is suffering from the falloff in advertising, particularly from technology and financial services companies. For its most recently reported quarter, total revenue fell 11% year-over-year, advertising sales 16% and net income a wrenching 85%. Still, the company hasn’t taken the hard times lying down. In 2001, it shaved $80 million from operating expenses; $70 million more in savings are expected for this year.

With 1.8 million subscribers, Dow Jones’ flagship publication, The Wall Street Journal, remains the dominant business daily. If the overall advertising market rebounds, the company looks likely to benefit.

So is such a turnaround ahead for media companies like Dow Jones? Miles Grove, chief economist for The Barry Group, a Bethesda, Md.-based marketing and consulting firm to the media industry, predicts 2003 ad revenue growth of 5.9%. “Assuming we have no unexpected shocks,” he cautions.

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NEW YORK – In the wake of last week’s terrorist attacks, media companies of all sizes did far more than simply deliver news.

The day following the attacks, for example, The Silicon Alley Reporter, a Manhattan-based publication covering New York’s new media and Internet industry, set up an emergency database pairing companies displaced from the disaster area with those who might have extra office space. With room to spare at its offices, The Silicon Alley Reporter itself was one of the first volunteers.

“We’re going to have five companies living in our office for who knows how long,” says Jason Calacanis, The Silicon Alley Reporter’s editor and chief executive.

In addition to giving, it’s clear that media companies also receive a benefit from the crisis, at least in the short term. “They’ll have a tragic story to tell,” notes Miles E. Groves, chief economist at the Barry Group, a Bethesda, Md.-based marketing and communications consulting firm. “Viewership, readership and listenership will probably be up across the board over at least the next few weeks.”

The longer term is more speculative, Groves warns, particularly with uncertainty over the intensity and duration of the United States’ response and the subsequent impact on the economy.

Whatever the outcome, though, more turmoil means more demand for distribution of information. Moreover, should the crisis spur public and private investment in infrastructure and technology, any positive economic impact could help stabilize ad spending budgets.

Full story at Forbes.com