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A company that has Out Foxed the Market



June 26, 2012 – Comments (1) | RELATED TICKERS: FOXA


Back in July, wow that was almost a year ago...hard to believe, News Corp. (NWSA) was embroiled in a phone hacking scandal that hit its stock pretty hard.  This dip in its share price piqued my curiosity, though at the time I ultimately decided to pass on investing real money in the situation.  I at least did end up adding NWSA to my CAPs portfolio to keep an eye on it. 

So, how has News Corp. performed since then?  This is one of the things that CAPS is excellent for keeping track of.  It has risen 35.03% versus a slight drop of -1.98% in the S&P 500.  Pretty nice.  It appears as though Rupert Murdoch may have realized that it is time to unlock even more value in the company.  Today it has been revealed that News Corp. is exploring the possibility of splitting itself into two companies, one that contains its print assets like the Wall Street Journal, book publishing and other newspapers and one that contains 20th Century Fox, Fox News and the Fox broadcast network.  Naturally, Mr. Market likes the idea, sending the stock up over 8% as I type.

Now that the stock is 35% higher than when I was first interested in it, its valuation metrics are not nearly as attractive.  It is rapidly approaching the $25 sum-of-the-parts valuation that Mario Gabelli's firm assigned to it back then.  I probably will not be purchasing a stake in NWSA with real money, though I suspect that there is a decent chance that it will continue to outperform if it goes forward with its spin-off plans and I likely would be adding it in CAPS if I did not own it here already.  

Here's a couple of articles on the subject for anyone who's interested.  Thanks for reading everyone.  Have a great day!

 News Corp. Split Looks Good to Shareholders 

News Corp. Exploring Breakup As Murdoch Comes Around  


1 Comments – Post Your Own

#1) On June 26, 2012 at 5:15 PM, TMFDeej (97.65) wrote:

Here's yet another interesting article on the subject:

Valuing a News Corp. Breakup


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