Is there a positive story to be told about Trinity Mirror? According to at least one stockbroking analyst, there are reasons for optimism about a company that has suffered a sudden plunge in its share price.
I spotted a note earlier this week, by Alex DeGroote of Panmure Gordon, that recommended investors should buy the publisher's stock.
So why did he go out on what looks like a limb when the City appears to have reached the conclusion that there is no value to be had in supporting the publisher?
His reasoning is, of course, very different from mine. He sees Trinity Mirror (TM) in strictly financial terms.
But I'm not going to let my editorial views get in the way while I summarise his very interesting and - it should be said - dispassionately favourable argument.
At present, TM's shares are trading for about 47p, giving the company a market value of just under �125m. But look, says DeGroote, at the freehold property assets. They are worth �185m alone (and are equivalent to a share price of 72p).
It does have debts of about �200m and a pension deficit of about �100m, but these are at five-year lows. Neither are they insurmountable problems given that the publisher is trading profitably.
Indeed, its national titles go on returning profits despite the competitive environment. ("It's like an annuity," he says).
Similarly, its regional titles - whatever the gloomy long-term forecasts about them being declining assets in a mature market - manage to turn a profit too.
He expresses some surprise that there has been no buyback of shares, which is a standard indication of a board's belief in the health of a company when its stock price is very low.
Unsurprisingly, he is not too happy about the failure to pay a dividend either.
He is also aware of other key factors, such as the rise in newsprint prices and the volatility of the advertising market.
Even so, Trinity Mirror's chief executive, Sly Bailey and her fellow directors, are bound to be buoyed by his optimistic view of their company.
Like them, he believes that TM could benefit from greater consolidation in the regional sector. He believes that TM could do well from asset swaps and points to the company's profitable integration of the papers it acquired from Guardian Media Group last year.
This shows what the company can accomplish, he concludes, if given the chance. In other words, if the government lifts restrictions that are said to be inhibiting consolidation.
But I wonder, as does DeGroote, whether the government would really take any action to prevent the major publishers from some kind of rationalisation.
After all, they are not genuine competitors, and there needs to be a recognition that there is a revenue problem because the ad market is in such flux, due to the recession and media fragmentation (ie, digital TV and the internet).
I have previously been highly sceptical about the benefits of consolidation, but Trinity's GMG deal has been an eye-opener.
I doubt that there would be much, if any, political pressure on the government if it did slacken the restrictions on an industry that clearly needs some kind of boost.
Sources: Panmure Gordon note/DeGroote interview
Source: http://www.guardian.co.uk/media/greenslade/2011/mar/25/trinitymirror-mediabusiness
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