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Weak earnings momentum and the maturation of traditional markets have led the publishing industry stocks to underperform the market and be ranked low on the timeliness scale. However, many book and periodical publishers have turned to electronic publishing and new media as alternate revenue sources and the textbook sector remains bright for educational publishers. There are several good selections for investors in publishing stocks, although prospects for the industry as a whole are uncertain.

The maturing of traditional markets is the single greatest issue facing publishing in the late 1990s, and industry expansion can no longer be the focus for higher tock prices. However, technology, such as on-line services, CD-ROMs, videos, and other forms of electronic publishing are being sought by both tradtional and non-traditional publishers. The future for these stocks is not certain and investors must be selective in their choices.

Some publishing industry companies will capitalize on a drop in paper prices and entry into new technological and alternative markets in 1997 so that their stocks will provide superior total returns throughout the decade and appeal to even conservative investors. Although high paper prices have placed publishing industry stocks in a poor Timeliness ranking throughout the 1990s, publishers who expand into electronic publishing, home video, CD-ROMs and computer software products will have business boosting potentiality.

Publishing industry securities are notorious for their poor timeliness ratings and their market underperformance and these securities are expected to do so in the immediate future but show signs of being a good long-term investment. Besides being a safe investment, publishing industry earnings will receive a boost from diversification into such areas as computer software, television and Internet. A levelling off of paper prices, which has been publishers' biggest cost woe, should make publishing industry stocks more desirable.