More than 200 stocks hit new 52-week highs on the New York Stock Exchange on Tuesday as the market powers ever higher. Toiling on the sidelines of this surge is former highflyer Martha Stewart Living Omnimedia (NYSE: MSO), which has the dubious distinction of being one of just a handful of names hitting 52-week lows these days.

The question for investors: is the Queen of domestic design becoming irrelevant, or simply the victim of bad-timing?

To be sure, it’s no fun being a magazine publisher these days. High-profile titles such as Newsweek are seemingly near death, while other esteemed titles such as The Atlantic are forced to cut the number of issues they publish each year. Yet Martha Stewart Living’s publishing business looks quite healthy — at least in terms of circulation. The company’s flagship Martha Stewart Living actually recently increased the amount of circulating copies its guarantees to advertisers to 2.025 million, while lesser titles such as Everyday Food (1 million) and Whole Living (650,000) are also posting rate base increases.

Trouble is, the weak economy has been pressuring ad rates. So these titles are doing just fine in terms of consumer popularity, but are generating steadily lower ad revenue. That should change when the economy finally starts to turn and ad budgets expand again. To be sure, we live in a digital world, and Martha Stewart Living’s nascent digital publishing initiatives, which are growing impressively, will never supplant the revenue that print advertising can garner. But as the number of magazine titles keeps shrinking, Martha Stewart’s titles should eventually stand out even more clearly to advertisers as platforms with a compelling reach.

Yet shares have already been reflecting this weak publishing environment for quite some time. Instead, they are slumping recently as the company switches horses mid-stream in terms of both merchandising and broadcasting partners. Those moves are hurting results now, but should pay off later.

On the merchandising front, Martha Stewart Living is no longer deriving any revenue from the longstanding relationship with the Kmart division of Sears Holding (Nasdaq: SHLD). That was always a contentious partnership, with Martha Stewart accusing Kmart of operating shabby stores and poorly promoting her eponymously-branded merchandise.

The company has subsequently inked deals with Home Depot (NYSE:HD), Macy’s (NYSE: M) and PetSmart (Nasdaq: PETM), but those retailers have been slow to make up for the lost revenue associated with the Kmart divorce. However, those retailers are still in the process of expanding the number of Martha-branded items in their stores, and by the middle of next year, quarterly merchandise revenue (which carries very high margins) should start to look more impressive. An upturn in the economy would surely help, too.

Just to keep it interesting, Martha Stewart Living threw another wrench into the mix. Tiring of erratic broadcast times (sometimes at 2AM) through its TV syndication deal, the company took all of its content to the Hallmark Channel in September. Early results were not promising, as viewers seemed to fail to follow Martha from over-the-air broadcasts to basic cable. Ratings were initially quite low in September, but started to rebound in October. Hallmark and Martha Stewart Living intend to heavily promote the broadcasts into the holiday season, which is often a time of peak viewership. With the holiday viewing base intact, the company hopes that 2011 broadcast revenue will be back at previous levels — if not higher — than in 2010.

The broader view is to have those magazine titles promoting both the TV programs and the retail partners, and to have the TV programs promoting the magazines and the retail merchandise. Right now, that whole effort is stumbling like a colicky horse. And shares move ever lower.

Action to Take –> What was a $20 stock in 2006 now trades for less than $5. Pretty much anything that could go wrong has gone wrong. Martha Stewart Living’s strategies are logical, yet the company’s execution on those strategies has not been impressive. But this is still a franchise that has deep resonance with female consumers. Those consumers are cash-strapped right now, and the advertisers that want to reach them are hesitant to spend. But it still looks as if time will heal these wounds, and shares will rebound as the magazine/retail/broadcasting kinks get worked out.

Shares may not see $20 again anytime soon, but a double from current levels in 2011 is certainly feasible if these synergies start to bear fruit.