Public media cos. by share growth (chart) BROADCAST AND PRINT STOCKS TAKE OFF; CABLE MIXED

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The recession that settled over the industry three years ago seems like a footnote in media history.

Income statements and balance sheets at most companies have begun to resemble pre-recession ledgers.

Buyout fever has returned with a vengeance. Witness the acquisition of Paramount Communications and, possibly, Blockbuster Entertainment by Viacom; Comcast Corp.'s tender for QVC, blocking QVC's effort to merge with CBS Inc.; the myriad cable deals.

The one big deal this time last year was the New York Times Co.'s acquisition of Affiliated Publications.

Media stocks have responded well, up an average 10.3% for the 12-month period ended June 30 (see chart at left). By comparison, the Dow Jones Industrial Average and the S&P 500 rose 3.1% and fell 1.39%, respectively.

Broadcasting stocks regained their popularity as improved prime-time programming attracted a stronger advertising following.

Despite the defection of affiliates and the loss of rights to NFL games to rival Fox Network, CBS is expected to post an 11% gain in second-quarter earnings. Share price of the top-rated network rose 33.8% to $313 a share.

Capital Cities/ABC also treated shareholders well last year, rising a sturdy 38.7% to $71.13. The company, which split its shares on a 10-for-1 basis earlier this year, is perhaps poised to eclipse CBS in the top network slot, say some analysts, who like ABC's strong prime-time lineup for fall and rising ad revenues.

Cable operators posted mixed results, rising as Baby Bells entered their domain ready to merge, and falling when many of the proposed megamergers turned sour as corporate cultures clashed and government-mandated rollbacks on basic rates cut into cash flow.

Among cable stocks hardest hit: Tele-Communications Inc. (down 10.4%), Turner Broadcasting System (off 15.4%) and Adelphia Communications Corp. (down 11.9%).

Some rose above the din: Cablevision Systems Corp. (up 24.7%) and Rogers Communications (up 10%).

A boost in classified and national advertising so far this year has breathed life into newspaper stocks, leading investors to add them to their portfolios.

All newspapers are waiting for is renewed spending in retail, still stuck in neutral. Newspaper advertising in major markets breaks down into 53% retail, 35% classified and 12% national.

Share growth winners through the midway mark of 1994: Media General, up 27.5%; Pulitzer Publishing, up 19.9%; Lee Enterprises, up 17.4%, and McClatchy Newspapers, up 16.5%. Noticeably missing from the list-despite strong gains in classified ad lineage-is Gannett, down 0.5%, and Knight-Ridder, down 2.2%.

Most newspaper companies show relatively low P/E ratios (price of stock divided by earnings per share for 12 months) in the teens and 20s (see chart at left), an indication prices are in line with earnings. Higher ratios may imply a just-completed poor quarter or that speculators are hedging their bets about future earnings or a potential takeover.

In radio, duopolies (couplings in single markets) enhanced radio values. Acquisition-minded Infinity rallied 33.9%. Downsizing Westwood One topped the leader board with a 158% gain. Radio stocks were the best media performers with the highest average gain in share price.

Mr. Nordby is president of stock analyst Nordby International, Louisville, Colo.

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