Buried in Warren Buffett's annual shareholder letter was a reference to the dying newspaper industry. Berkshire (NYSE:BRK-A) owns the large daily in Buffalo and Buffett has been on the board of newspaper firms including The Washington Post (NYSE:WPO) and Capital Cities/ABC, now a part of Disney (NYSE:DIS).

If anyone needs proof of how poorly the public newspaper chains are doing, they only need to look at McClatchy (NYSE:MNI), one of the largest. The firm made a point of doubling down on its bet on the industry by buying Knight-Ridder last year. The result has been a train wreck.

McClatchy seems to make a new low every day. The stock now trades at $36.68. Over the last two years, the shares are down almost 50% against a move up of almost 20% for the S&P. McClatchy bought more newspapers in the teeth of a secular decline in circulation and advertising that is not likely to abate. The company's ad revenue dropped over 5% in January. The company's 10-K shows that most of its large newspapers like the Miami Herald lost circulation last year.

After showing net profits for 2002 through 2005, McClatchy had a net loss of $155 million in 2006, much of it from discontinued operations. The company has long-term debt of almost $3.3 billion.

McClatchy may survive the pounding that newspapers are taking, but it is almost impossible to see how it will prosper.

Douglas A. McIntyre is a partner at 247WallSt., LLC.

As we move toward the end of the year, 24/7 Wall St. went looking for ten undervalued big cap stocks. We looked at research reports, P&Ls, balance sheets, projections, SEC filings and stock price movement. We came up with ten companies that the market appears to have passed by, or simply doesn't like. But each one has the makings of a winner.

Gannett. Investors hate newspaper stocks, but Gannett Co., Inc (NYSE:GCI) has a huge web presence and monopolies in many of the markets in which it operates. The company is also a cash machine.

eBay. The holiday season should be good for eBay Inc. (NASDAQ:EBAY) as industry figures show that e-commerce is coming into its own. The company's PayPal division is a juggernaut.

Sprint. There are only three significant players in the growing U.S. cell market and Sprint Nextel Corporation (NYSE:S) is one. After missteps with the NexTel integration, the company's new WiMax network should pay big returns for investors.

Hovnanian. With housing prices falling and sales of new and existing homes off, who could love a home building stock? The CEO says the market has hit bottom and Hovnanian Enterprises, Inc.'s (NYSE:HOV) land hedging strategy is among the most conservative in the industry.

Alcoa. The world's largest aluminum company. The bull case is that demand in India and China will push up prices for more than the next decade. Alcoa Inc. (NYSE:AA) also just dumped a dog division.

Analog Devices. Analog Devices, Inc. (NYSE:ADI) trades well below where it did five years ago. Net income rose 19% in the last quarter. The board just increased its share buy-back and upped the dividend.

The Washington Post Company (NYSE:WPO). Most investors assume this is a newspaper company. It is not. Its Kaplan and other online learning operations are highly profitable and are becoming the lead operating income divisions for the company.

Anheuser-Busch. Beer is not sexy, but Anheuser-Busch Companies, Inc. (NYSE:BUD) is making purchases to position itself in South America and China. It is also raising prices, a good sign that demand is strong.

Amgen. Cash flow is running 32% of sales. Analyst have been upgrading the stock as antitrust litigation against the company seems to be favoring Amgen, Inc. (NASDAQ:AMGN). Earnings in the last quarter beat forecasts.

Linear Technology. Part of the out-of-favor semiconductor industry. Linear Technology Corp. (NYSE:LLTC) is impressively profitable and analyst price targets on the shares are well above the current price.

Douglas A. McIntyre is a partner at 24/7 Wall St.