NWS  News Corporation

Exchange

NASDAQ

Sector

Consumer Services

Industry

Newspapers/Magazines

Market Cap.

8.03B

Vuru Grade

51.40/100

Current Price

$13.80
+0.20 (+1.47%)

Growth Price

$23.34
Undervalued by 69.10%

Stability Price

$21.03
Undervalued by 52.43%

Company Metrics

  • P/E 40.82
  • P/S 0.96
  • P/B 0.71
  • EPS -0.38
  • Cash ROIC 4.75%
  • Cash Ratio 0.75
  • Dividend 0.20 / 1.45 %
  • Avg. Vol. 464,183.00
  • Shares 581.88M
  • Market Cap. 8.03B

Company Description

News Corporation operates as a diversified media company worldwide. Its Cable Network Programming segment engages in producing and licensing programming distributed through cable television systems and direct broadcast satellite operators primarily in the United States, Latin America, Europe, and Asia. The company's Filmed Entertainment segment produces and acquires live-action and animated motion... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Taming News Corp's Toxic Culture
Project Syndicate - 2 hours ago
LONDON - “When someone tells you who they are,” counsels the novelist Maya Angelou, “believe them the first time.” The same advice applies to companies.
Former News Corp. Exec David Haslingden Sells Business to Blue Ant (EXCLUSIVE)
Variety - May 24, 2017
Producer, distributor, and channel operator Blue Ant Media has bought Racat Group, the media firm set up by former Fox Networks Group president and Rupert Murdoch lieutenant David Haslingden.
News Corp journalist quits gay rights lobby's board after being 'targeted ...
The Guardian - May 23, 2017
“How can NSW GLRL call out the trans hate from News Corp when one of its national journos sits on the board?” Rodney Chiang-Cruise wrote on Twitter.
LGBTI activists force News Corp journo to quit NSW Gay and Lesbian Rights Lobby - The Australian
Up to 70 News Corp Australia photographers made redundant
The Guardian - May 15, 2017
News Corp Australia, which posted a second-quarter loss of $287m in February and cited impairments in the Australian newspaper business as a key factor, is expected to target production staff, including subeditors and designers, next.
News Corp Australia outsourcing drive sees up to 70 photographers let go - The Drum
News Corp. shares rise after earnings beat
CNBC - May 9, 2017
News Corp. posted adjusted fiscal third-quarter earnings of 7 cents per share on revenue of $1.98 billion, up 5 percent year-over-year from $1.89 billion.
News Corp. boosted by digital subscriber gains - MarketWatch
News Corp quarterly revenue beats on higher ad revenue - Reuters
News Corp Unveils New Media Buying Solution To Target Queenslanders
B&T - 14 hours ago
Michael Miller, executive chairman at News Corp Australasia, said: “We aim to simplify the media marketing landscape, empowering marketers to achieve scale and local area connections, reaching 87 per cent of Queensland's population, through one media ...
News Bulletin: Brands do Vivid; KFC inks rugby deal; News Corp works assets
AdNews - 14 hours ago
News Corp Australia has launched a new media buying offering giving marketers direct access to 3.2 million Queenslanders. 'QPower' aims to offer more media buying simplicity in accessing all of Queensland, including every regional town, “in one buy”.
News Corp. reports stronger than expected growth
New York Post - May 10, 2017
News Corp. reported on Tuesday better-than-expected results for the three months ended March 31 - led by strong growth at its Realtor.
News Corp. introduces service to crack down on 'fake news' ads
New York Post - May 3, 2017
News Corp. is introducing a new service to ensure online ads don't appear next to fake news or offensive videos - a feature that Google's YouTube service has failed to supply of late, spurring a slew of advertiser defections from the streaming-video ...
News Corp takes aim at Queensland with united media buying offer after ARM deal
MuMbrella - May 27, 2017
On the back of its recent acquisition of ARM News Corp has launched a new media buying offer in a bid to lure more advertisers to the disperse and fragmented Queensland market, branding the solution QPower.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for NWS to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate NWS's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$13.80 Current Price

$23.34 Growth Price (DCF)

Undervalued by 69.10%


Growth Rate Assumed by Market: -500.00%


Future Free Cash Flow Growth Rate: -22.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$21.03 Stability Price (EPV)

Undervalued by 52.43%


Discount Rate: 15.0%

$24.31 Book Price

Undervalued by 76.16%


Poor Cash Return on Invested Capital over the past 5 years

NWS has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

NWS has only created $4.75 of cash for every $100 invested.
Figures in USD. Fiscal year ends in June
20122013201420152016
Free Cash Flow 2.85B 169.00M 475.00M 453.00M 696.00M
divided by
Invested Capital 37.42B 11.09B 11.08B 10.99B 11.21B
Cash ROIC 7.62% 1.52% 4.29% 4.12% 6.21%

Poor Return on Equity over the past 5 years

NWS has shown an inability to deliver strong results for shareholders. This could be due to poor management, NWS operating in a highly competitive industry, or having a weak business in general.

NWS has only generated $2.76 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in June
20122013201420152016
Net Income 1.41B 547.00M 294.00M -78.00M 250.00M
divided by
Stockholders' Equity 24.68B 12.56B 13.24B 11.95B 11.56B
Return on Equity 5.70% 4.36% 2.22% -0.65% 2.16%

Excellent Business Performance over the past 10 years

NWS has been able to maintain profitability in good times and bad. This could mean NWS has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

NWS has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Free Cash Flow 2.80B 2.48B 1.15B 2.94B 3.30B 2.85B 169.00M 475.00M 453.00M 696.00M

Good Balance Sheet

NWS's Total Assets double Total Liabilities. Its financial position is adequate. Remember to check Shareholders' Equity to see if it's stable or growing. It's one of the best measures of whether a company is creating value for shareholders.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Cash 7.65B 4.66B 6.54B 8.71B 12.68B 9.63B 2.38B 3.15B 1.95B 1.83B
Current Assets 15.91B 14.36B 15.84B 18.02B 21.78B 19.45B 4.64B 5.27B 3.98B 3.89B
Total Assets 62.34B 62.31B 53.12B 54.38B 61.98B 56.66B 15.64B 16.49B 15.09B 15.48B
Current Liabilities 7.49B 9.18B 10.64B 8.86B 9.57B 9.62B 2.17B 2.26B 2.16B 2.44B
Total Liabilities 29.42B 33.69B 29.90B 29.27B 32.47B 31.98B 3.09B 3.25B 3.15B 3.92B
Stockholder' Equity 32.92B 28.62B 23.22B 25.11B 29.51B 24.68B 12.56B 13.24B 11.95B 11.56B
Current Ratio 2.12 1.56 1.49 2.03 2.28 2.02 2.14 2.33 1.84 1.59
TL-to-TA 0.47 0.54 0.56 0.54 0.52 0.56 0.20 0.20 0.21 0.25

Low or No Reinvestment of Profits over the past 10 years

NWS has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to NWS operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Retained Earnings 5.56B 11.38B 5.84B 7.68B 12.05B 8.52B - 237.00M 88.00M 150.00M
Retained Earnings Growth - 104.80% -48.66% 31.40% 56.86% -29.26% -100.00% - -62.87% 70.45%

Highly Competitive Industry over the past 10 years

It's likely that NWS is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely NWS invests heavily in R&D and Sales, General & Administrative expenses.

Only $4.95 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Net Income 3.43B 5.39B -3.38B 2.54B 2.89B 1.41B 547.00M 294.00M -78.00M 250.00M
divided by
Revenue 28.66B 33.00B 30.42B 32.78B 33.41B 33.71B 8.89B 8.57B 8.63B 8.29B
Net Profit Margin 11.96% 16.33% -11.10% 7.75% 8.66% 4.17% 6.15% 3.43% -0.90% 3.01%

Varying Pricing Power over the past 10 years

NWS has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. However, there is a substantial variation in their Gross Profit Margins from year-to-year, which indicates inconsistent performance. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$44.51 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Gross Profit 10.01B 12.47B 10.86B 11.76B 12.35B 33.71B 3.47B 3.44B 3.61B 3.56B
divided by
Revenue 28.66B 33.00B 30.42B 32.78B 33.41B 33.71B 8.89B 8.57B 8.63B 8.29B
Gross Margin 34.93% 37.78% 35.70% 35.89% 36.96% 100.00% 39.04% 40.06% 41.79% 42.98%

High Capital Intensity over the past 10 years

NWS spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

62.52% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Capital Expenditure 1.31B 1.44B 1.10B 914.00M 1.17B 939.00M 332.00M 379.00M 378.00M 256.00M
divided by
Net Income 3.43B 5.39B -3.38B 2.54B 2.89B 1.41B 547.00M 294.00M -78.00M 250.00M
Capital Expenditure Ratio 38.18% 26.79% -32.59% 36.00% 40.46% 66.74% 60.69% 128.91% -484.62% 102.40%

Very Strong Dividend History over the past 10 years

NWS has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests NWS is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Dividend Paid 369.00M 373.00M 366.00M 418.00M 500.00M 593.00M 20.00M 24.00M 30.00M 147.00M
divided by
Shares Outstanding 2.19B 2.97B 2.61B 2.63B 2.63B 2.50B - 579.70M 581.00M 582.50M
Dividend Paid Per Share 0.17 0.13 0.14 0.16 0.19 0.24 - 0.04 0.05 0.25
Price at Year End 20.41 9.05 15.80 16.14 18.18 25.28 17.75 15.18 14.10 11.80
Dividend Yield 0.83% 1.39% 0.89% 0.99% 1.04% 0.94% - 0.27% 0.37% 2.14%

History of Stock Buybacks over the past 10 years

NWS has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Shares Outstanding 2.19B 2.97B 2.61B 2.63B 2.63B 2.50B - 579.70M 581.00M 582.50M
Stock Bought Back - -26.25% 13.70% -0.57% -0.19% 5.15% - -100.00% -0.22% -0.26%
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