What tends to create cheap stocks?
We’ve seen some excellent value investors take positions in News Corp. in recent months, but the stock s continued to go nowhere. Why? Mandana Hormozi: With a wide variety of media businesses, from newspapers to satellite TV to television stations to cable networks, News Corp. has exposure to all of the structural industry changes that are affecting media content and distribution. There s concern distribution companies are at risk of being disaggregated, that traditional media is fighting a losing battle for advertising against Internet companies, and that, overall, the proliferation of outlets for advertising will result in smaller pieces of the pie for incumbents. More specifically to News Corp., we believe the market is concerned that Rupert Murdoch is a serial acquirer, who will always sacrifice cash flow for future growth and is apt to spend too much on a big acquisition, say for an Internet company. Liberty Media’s (nyse: L – news – people )18% ownership block is also weighing on
