NWS 3.11% $30.16 news corporation..

hold your horses

  1. 11,632 Posts.
    Hey guys it may not be the time to sell NWS just yet..
    God knows I've held it long enough..
    Have a little read of this..

    Macquarie Bank Limited ABN 12 123 456 789

    News Corporation
    Why John Malone loves News Corp

    --------------------------------------------------------------------------------
    Stock: NWS AU
    Volatility Index: medium


    Shareholder attempts to prevent the extension of the poison pill for another two years (supported by John Malone) bring into clear focus its importance to the Malone camp. We believe Malone sees that control of News Corp's (NWS) assets (with a 'footprint' value of US$74bn) is exercised through voting stock in the Murdoch family trust with a value of US$4.8bn, a massive amount of leverage over some of the best distribution assets in the world, a fact acknowledged by both Murdoch and Malone.

    Malone's company, Liberty Media, controls voting stock to the value of US$3bn, with a further US$5bn in non-voting stock. This could be sold to buy ordinary stock, but for the poison pill. It is for this reason that Malone hopes the poison pill is removed.

    The shareholding structure of News Corporation can be thought of as a series of concentric circles. Altogether, the sum of these concentric circles means that NWS as a company has influence over around US$74bn of net assets, both in content and distribution. This value represents both the capitalisation of the ordinary and limited voting stock in News Corp, as well as the equity values of the minorities (ie those holders of BSkyB etc which are non-NWS holders) of NWS listed equity accounted companies.

    Impact

    The formal valuation suggests that the underlying price of NWS stock should be closer to US$21.05/share (A$27.70/share). However, this is the valuation to a portfolio investor. For John Malone, the equation would be materially higher because of the value that the NWS distribution assets could bring to any content assets of Liberty (of which there are many).

    This is because Malone views NWS from the perspective of a content producer (Fox Film, Twentieth TV etc) which has access to distribution (DirecTV, BSkyB etc). This distribution access means that the content companies are even more valuable (since distribution for this content is more or less a certainty).

    Earnings revision

    No change.

    Price catalyst

    12-month price target: A$27.70.

    Catalyst: 30%+ earnings per share growth in 2006.

    Action and recommendation

    We maintain our outperform recommendation. NWS is trading at a 30% discount to our $27.70 share price target, with the expectation of 30% earnings per share growth to come in 2006.


 
watchlist Created with Sketch. Add NWS (ASX) to my watchlist
(20min delay)
Last
$30.16
Change
0.910(3.11%)
Mkt cap ! $17.79B
Open High Low Value Volume
$30.64 $30.64 $30.15 $3.896M 128.6K

Buyers (Bids)

No. Vol. Price($)
1 154 $30.10
 

Sellers (Offers)

Price($) Vol. No.
$30.17 661 1
View Market Depth
Last trade - 16.10pm 08/03/2021 (20 minute delay) ?
(live)
Last
$30.16
  Change
0.910 ( 3.41 %)
Open High Low Volume
$30.46 $30.57 $30.16 113642
Last updated 15.59pm 08/03/2021 (live) ?
NWS (ASX) Chart
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.