Communications
The current stock price applies an overly punitive 37% conglomerate discount to NWSA’s valuation, according to Craig Huber’s detailed SOTP analysis. Craig has no doubts the company should be broken up, arguing that management could greatly enhance shareholder value by doing any of the following: 1) Distribute REA shares held by NWSA to existing shareholders, ideally in a tax-free structure. 2) Wait for a much better environment and then sell Move (Realtor.com). 3) Sell / spin-off Foxtel. 4) Spin off Dow Jones. 5) Sell Books operation. 6) Sell Factiva. 7) Shed underperforming assets such as its secularly declining News Media segment. While investors wait patiently for portfolio simplification, fundamentals continue to improve. Craig raises his earnings estimates for both this year and next.
Edition: 200
- 29 November, 2024
Communications
Using Craig Huber’s 2024 EBITDA estimates and segment multiples in his SOTP analysis suggests that the current price is implying an overly punitive 42% conglomerate discount to NWSA’s valuation. If management won't break up the company, then they should at least sell / spinoff Subscription Video Services and break out Professional Information into its own segment. Craig notes that there are signs that NWSA’s portfolio is moving in the right direction including some shrewd acquisitions as well as content licensing deals with Google, Facebook and Apple, but the stock has been trapped in underperformance (7 of last 9 years) and something big needs to change here.
Edition: 142
- 19 August, 2022