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Globe and Mail Calls ‘Dead Tree’ Industry a Value Trap


September 4, 2012
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A Globe Investor piece published on Monday described the printing and paper industries as being value traps for investors, meaning that while low share values may attract investors, they may never rise again.

Author David Milstead pointed to Lexmark’s recent decision to divest from consumer inkjet as an example of a company floundering in today’s digital age. Milstead also looks at forestry players such as Domtar as an underperformer and publishing giants such as RR Donnelley, Torstar, and Glacier Media.

“I still think the ‘all-digital life’ has a later ETA than the digerati claim,” writes Milstead. “But it doesn’t matter what I think or if I’m right; sometimes, in investing, perception is reality. And the perception is that these companies’ earnings are on a steady path to oblivion. No matter the profits from paper right now; it’s all turning out to be very real losses for investors.”

Read the full Globe story here.