Fox Corp. (FOXA) (FOX) and The Walt Disney Company (DIS) recently closed their $ 71 deal, giving most of the assets of the former Twenty-First Century Fox to Disney, allowing both companies to go their separate ways. I advised investors to buy the dips after the deal in both companies, which proved to be a good one for Disney after April 11 Investor Day. New all-time highs were reached there, as Disney's future is brighter than ever.
Now Fox has scheduled his earnings report for May 8, 2019, the Investor Day follows on May 9, 2019. Fox could cater for a handsome price rise revealing his future plans as many investors wait to see what the company says before they buy into the company's future history.
Fox is in an excellent position to capitalize on the promotional dollars associated with the US presidential election cycle, which takes place every four years and will be completed by the end of 2020. Prospective candidates have already announced their candidacy and participated in Town Halls, while Fox's news channel in April ended up being number one in the entire cable for the 34th consecutive month of the day and at the end of the day I ended onlookers. Fox is eager to grab promotional dollars from all areas of the political spectrum, as its primary target audience is usually a conservative base, while Town Hall events are also open to many Democratic and Liberal candidates such as Bernie Sanders, Kirsten Gillibrand, Pete Buttigieg and others are organized.
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The upcoming political cycle could be a lucrative time for Fox as it could begin transitioning to a digital streaming and distribution model over the next few years as the new FOX Media Center is being announced at the Arizona State University Research Park in Tempe, Arizona. The media center will be Fox's streaming and technology site as soon as it's operational in 2021.
Fox could be a potential cash cow if he wants, since he has control over many years of profitable assets with little to no debt after the Disney deal. This gives Fox a good option for the future, as it can declare a potentially nice dividend to shareholders when it comes to free cash flow. It could also introduce a more conservative dividend and be open to M & A activity, including a possible merger or acquisition of News Corporation (NWSA) (NWS), from which Twenty-First Century Fox split in the summer of 2013. With a market capped at just over $ 7 billion, News Corp's acquisition of Fox could make sense in rebuilding some scale or diversity on its platform, with Fox hovering around a $ 23 billion market capitalization ,
At the beginning of Fox Since this is a brand new form, it may not yet have an appropriate M & A premium in the stock that is open to a company that makes changes to its structure for the benefit of its shareholders can. The Murdochs who run Fox and own a large number of their shares have historically been open to divisions and acquisitions, so a deal in the future may make sense again if the price is right. Because Fox News is one of the few major news organizations in the US to cable, this could be a potential M & A target for emerging streaming companies looking to expand their offerings in the future.
Some come to mind, including Apple Inc. (AAPL), whose Apple TV + will be released this fall with the launch of the News + service. Amazon.com Inc. (AMZN) may consider it a potential add-on to add value to its Prime customers as it furthers the ecosystem it builds around Prime. Finally, Netflix Inc. (NFLX) may seek to add value outside of creating original content by purchasing a news organization to enhance its value proposition given the myriad of streaming services and offerings coming online next year. All of these and other actors in space could potentially bid for Fox, as the market capitalization of $ 23 billion may be far more feasible than Disney's massive $ 71 billion in most of the assets of the former Twenty-First Century Fox.
The deal with Disney and the former Century Century has been completed. Both companies are breaking new ground for future growth and prosperity. Disney Investor Day was an undisputed success as it persuaded investors from its Disney + streaming service as Disney's shares rose at all-time highs. Fox's ability to engage investors after completing the Disney deal will be just around the corner with the upcoming earnings report and Investor Day coming soon. Fox has potential catalysts that include the US presidential election cycle as well as potential mergers and acquisitions as it seeks to leverage its cash flows after the deal with Disney has been cleared of short-term debt problems. I continue to be at Fox as well as Disney with oversized positions and a target price of $ 45 at the end of the year for Fox. Good luck to all.
Disclosure: I am / we are long FOX, DIS, AAPL. I wrote this article myself, and it expresses my own opinion. I can not get any compensation for it (except from Seeking Alpha). I have no business relationship with a company whose inventory is mentioned in this article.