News Corporation NWSA is continuing with its expansion strategy by making significant investment moves. The company, which split from Twenty-First Century Fox, Inc. FOXA and offers e-books for devices sold by Amazon.com Inc. AMZN and Apple Inc. AAPL, has been diversifying its revenue streams and attempting to enhance its digital business globally.
Of late, the company raised its stake in APN News and Media Limited, an Australian media company, to 14.99%. APN’s lucrative portfolio of radio and outdoor media assets, along with printing operations, makes it an attractive opportunity to harness. The company also acquired VCCircle Network, a provider of digital data, business information, training and conferences network for private equity, venture capital and entrepreneurs.
In Dec 2014, News Corporation acquired BigDecisions.Com, the provider of financial decision-making tools. The online platform that commenced in early 2013, caters to customers’ needs in the fields of health and life insurance, retirement planning, education of children, and purchasing and renting of real estate. However, the amount of the buyout – which also includes FinDirect Services Pvt Ltd., the website’s parent company – was not disclosed.
In Nov 2014, News Corporation made a strategic move by investing in PropTiger.com, founded in 2011 in order to tap the burgeoning residential real estate market in India. The company acquired a 25% stake in Elara Technologies Pte Ltd, the parent company of this leading Indian digital real estate website, for approximately $30 million. The company had also acquired Move Inc., which operates property listings websites in the United States, for $950 million.
News Corporation’s diverse revenue streams hedge it against economic cycles. The company derives revenues from subscriptions, copy circulation, licensing and affiliate fees, direct sales, and advertising and sponsorships. Moreover, a strong balance sheet provides it with the financial flexibility to focus on strategic acquisitions, operational enhancement and shareholder-friendly moves. However, the company’s lower-than-expected results for third-quarter fiscal 2015, and downward estimate revisions for the current fiscal and 2016 over the past 60 days, make us cautious on the stock.
Currently, News Corporation carries a Zacks Rank #3 (Hold).
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