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News Corp Inc. (NWS)
In a
world littered with unchecked
news, commentary and opinion that flows like Niagara Falls into our
everyday lives,
I think that the average individual is looking for real guidance and
clarity
amidst the confusion. At the very least,
consumers want an information source that they trust to be fair,
knowledgeable
and one that elucidates the boundaries between fact and fiction. (Of
course
some will argue may point with NWS)
“Old
media” companies like News Corp
are reinventing themselves in our digital age. Zacks saw this change a
while
back and moved NWS to a number 1 Rank (Buy).
News
Corp is just about everywhere we
get information and entertainment. The
stock has been reaching new heights over the past several
months.
It may be a stock to watch as it gains
momentum.
Company
Description
News
Corporation’s diversified global operations include the production and
distribution of motion pictures and television programming; television,
satellite and cable broadcasting such as the Fox, FX and Speed
networks; the
publication of newspapers, magazines, books including the Wall Street
Journal,
The New York Post, Dow Jones and more. They have
over 150 news brands alone.
Negative
news
swept the company in August of last year, sending shares lower by over
28% to a
low of around $13.89. Since then the
company has been barreling back, cutting publishing costs and improving
their
income streams.
Financial
Profile & Earnings Estimates
NewsCorp
is
trading at about 15 times earnings, with a forward p/e projection of
13.31 a
year from now. Last quarter, they reported
2.7 billion in income (33.9 billion in revs) up 7.9% year over
year.
NWS surprised estimates the past two quarters
by 20.69% and 10.34% respectively.
Their
fiscal year
ends in June, with expectations for 20.6% earnings growth in 2012 and
21.5% in
2013.
FY2012
earnings
estimates have been steady at 1.39 since October of 2011 and are up .11
from
the beginning of 2011. NWS is expected to earn 1.66
in 2013. At a 14 multiple (about low-average for the
S&P 500) you have a $23.25 stock. 14
would be a very low multiple for NWS, which has been trading above a 15
p/e for
the better part of the past 2 years.
Market
Performance
Since
reaching
that low point in August, NWS has soared 36%.
Even amidst all the mess in the
markets, NWS has been maintaining its upward trend and today broke out
of its technical
resistance and 52 week high of $19.00, a very bullish sign.
12-Month
Chart4
On
the chart, you
can see shares have been rallying since August.
The breakout today may give NWS a
5% boost. Look for the $19.00 level to
become support. Look for $18.00 as your support
level below that. For now, the stock
continues to make higher lows and higher highs, which is indicative of
a
momentum stock in a bullish pattern.
Jared
A Levy is
the Momentum Stock Strategist for Zacks.com. He is also the Editor in
charge of
the market-beating Zacks
Whisper Trader Service.
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