FelCor: Its portfolio of mostly upscale hotels includes Embassy Suites and Doubletree properties. The stock, now below 13, is down from a July peak of 29 and carries a dividend yield of 11%. Despite the company's good financial results, FelCor stock is depressed because of concerns about the impact of a weaker economy on the lodging business. FelCor, however, should benefit this year from extensive renovations of its hotels in 2007.

With Bon-Ton's share price down to under $6 from $57 last spring, Wall Street is worried whether the York, Pa., retail chain will make it. Bon-Ton now has a market value of just $100 million, versus estimated debt of $1.2 billion at the end of January -- fourth-quarter financial results haven't been released yet. Bon-Ton bet the company on a $1 billion debt-financed purchase in 2006 of Carson Pirie Scott and other chains from Saks, and that deal looks like a loser. The bad news is that Bon-Ton's same-store sales have been weak, including an 11% drop in December. Bon-Ton earned nearly $3 a share in 2006, but it may have operated close to breakeven last year. The good news is that cash flow is comfortably above interest payments and Bon-Ton isn't burning cash. Assuming vendors continue to allow Bon-Ton to finance its inventories, there appear to be no near-term risks to its survival. Given a sizable base of short sellers, Bon-Ton stock could rally on any hint of good news. Safer choice: J.C. Penney.

As the leading manufacturer of glass tableware in the Western Hemisphere, Libbey has exposure to the faltering U.S. restaurant industry, which has depressed its shares. The stock, around 16, trades for about 27 times projected 2008 profits, a rich-looking valuation. The high P/E, however, reflects a steep 13% interest rate on its debt that eats into earnings. Once the credit markets thaw, Libbey may be able to refinance debt, cutting interest expense by perhaps three percentage points and boosting earnings.

Idearc should have ample earnings to pay the annual $1.37 dividend. If revenue declines persist, Idearc could cut the dividend in order to focus on debt repayment. With its stock down 75% this year, Idearc could surge on any signs its business is stabilizing. No Safer Choice: Rival R.H. Donnelley (RHD) also has a lot of debt and similar business problems.

Investor Thomas Russo, a partner at Gardner, Russo & Gardner, a Pennsylvania money manager, has been on board McClatchy all the way down and isn't giving up. He calls McClatchy "a cheap option on an economic and advertising recovery, its Yahoo! alliance and its Internet assets." McClatchy now is valued at just eight times projected 2008 earnings per share. Equity market value is just $800 million, versus debt of $2.4 billion. The dividend yield is 7%. Management is focused on debt repayment, but Russo argues that with the stock so depressed, the company should consider a buyback. McClatchy is valued at less than six times estimated 2008 cash flow, versus more than 10 times cash flow for the private Tribune

Gray is highly leveraged with a market cap of $300 million, against debt of $900 million. "Our stock is extremely undervalued," says Gray President Bob Prather, who lately bought 11,500 shares in the open market. "Wall Street is down on Old Media and we've been dragged down by newspapers and radio. TV has some issues, but they're nothing like those industries." Thanks to political ads, Gray should enjoy a strong 2008 and it plans to use that windfall to pay down debt. If TV can hold its own in the face of the Internet advertising threat, Gray should do well

Unless Americans stop going to the movies, Carmike looks like a survivor, and its stock offers a good bet on rising attendance or higher theater valuations. The company may seek to cut debt by selling $175 million of real estate. The theater business is still pretty good, especially pop corn and other concessions, which produce 90% margins. If Hollywood has a good 2008, Carmike shares could double.

Its shares may seem tempting at just $1, but Charter is valued at nearly 10 times projected 2008 pre-tax cash flow, versus six to seven for Comcast and Time Warner Cable (TWC), which have far stronger balance sheets. Charter has $20 billion of debt. Lehman Brothers analyst James Ratcliffe, who carries an Underweight rating on the stock, last week cut his price target to $1 from $2, saying the stock is "still too expensive." Charter continues to bleed cash after capital expenditures and some of its debt yields more than 20%