The throwaway line that "you can't believe anything you read in the papers" is such a commonplace one, but people don't really think that way. A bond of trust does exist between a newspaper and its readers, and when it gets broken, as the management of the humbled Daily Mirror is discovering, readers will desert in their droves.
With morning newspaper readership in a gentle but apparently irreversible decline, the Mirror can't afford such a horrible lurch downwards in its circulation base. All the long-term questions over this side of the Trinity Mirror group will have to be revisited, less than a year after Sly Bailey persuaded her recalcitrant shareholder, Tweedy Browne, to accept the Mirror's place within the group.
Ms Bailey has done more than her predecessor to bring the two halves of the group together in an operational sense, cutting costs by axing layers of management and centralising purchasing. There is also a review of the group's printing arrangement due soon. These are almost all in the share price now, though
But she has yet to display that she has a strategy for bucking the national newspaper market's downward trend. Her positioning of the Mirror as offering "seriously good popular journalism" hasn't yet added up to much, and even sounds a bit ironic after the fake pictures.
The regional papers are good assets, with classified advertising growing strongly again after a robust performance during the economic downturn and in the face of a longer-term threat from the internet. But much of their growth potential is cancelled out by weakness elsewhere in the group.
It is difficult to justify the share price rating of 14 times the likely earnings this year. We tipped them as a "buy" at 532p only six months ago. But they are now substantially higher, the dividend yield below 3 per cent when it had been more than 4 per cent.
And, thanks to the fake pictures debacle, the trading outlook is substantially worse.
Hold Go-Ahead for rising dividend yield
Go-Ahead Group is a conglomerate operating in the transport sector, running buses and regional coaches, trains in the South-east of England and also operating an "aviation services" business handling baggage, running business lounges and processing passengers. It also operates airport car parks.
Its bus business, the biggest contributor to profits, is driving the group's performance in the right direction, in large measure thanks to the extra services being put on in London and Go-Ahead's own top-of-the-table service quality. Acquisitions, too, have been integrated and operated well.
Also encouraging in a trading update yesterday, the Thames Trains franchise that it was stripped of has turned in a last-minute profit. It continues to run Southern and Thameslink and has a one-in-four shot at Kent's South Eastern franchise, which is decided at the end of the year.
The one area of real disappointment has been the aviation services business, which accounts for almost a fifth of turnover but has been losing money. This whole market has been tough since the attacks of 11 September, when airlines began retrenchment and cost cutting. There has also been industrial unrest.
Go-Ahead is flagging another write-down in the value of this business, and that will dent full-year profits, but there were bullish comments on improvements at Gatwick and the promise of a small profit for the full year.
Go-Ahead is no soaraway growth story, but it is a safe, solid performer in a sector prone to grand ambition and poor quality service. With little debt, there is scope for its 3 per cent dividend yield to rise substantially in the coming years. Hold.
Outsourcing boom means Xansa is a long-term buy
When British companies began to cotton on to the potential of shipping their mundane administrative work to low-cost India, Xansa, the IT services company, was already one step ahead of them.
It set up operations in India in 1997 and now has nearly 2,000 people working there, providing IT support to a number of UK blue chips. This means everything from consultancy, to running systems and daily maintenance on all aspects of business such as human resources, accounting, or supply chain management.
Reporting its full-year figures yesterday, Xansa said it is ready to exploit its established position in India to the max now that there encouraging signs of improvement in the IT market as a whole. Losses before tax were reduced by 80 per cent to £31m.
Over the past 12-18 months it has pulled out of some of its loss-making consultancy operations in the US, Asia and continental Europe. It is now winning contracts in these regions that it can support directly from India, at much reduced costs on both sides. It expects to have 4,000 employees in India by the end of the year.
At 83p the shares, at around 16 times earnings, are valued at slightly below the sector average. The company is well positioned for the growing trend to move off-shore. Long-term buy.