Fox Corp. (FOXA) (FOX) and The Walt Disney Company (DIS) recently concluded their $ 71B deal, delivering the bulk of the former twenty-first century-old assets to Disney, and released both companies to go their own way. I recommended investors to buy post-deal dips in both companies, which have worked well so far for Disney after Investor's Day April 11, where it made new full-time slots that Disney's future looks brighter than ever.
Now Fox's earnings report has planned on May 8, 2019 with Investors Day to follow May 9, 2019. Fox could be in line for a nice stock price shock as well as it presents its Future Plans, so many investors will wait to see what the company says before buying into the company's future history.
Fox has a good position to take advantage of the advertising dollars associated with the US presidential election, which takes place every four years and will end towards the end of 2020. Potential candidates are already announcing candidacy and attending the Town Hall as Fox's news channel ended April as number. a total cable network for the 34th month in the trend today and primed my seership. Fox wants to obtain advertising money from all walks of life from the political spectrum, as the primary title is usually a conservative base, while also organizing council events for many democratic and liberal candidates, including Bernie Sanders, Kirsten Gillibrand, Pete Buttigieg and others.
Slide from Borrell Associates
The upcoming political cycle could be a lucrative time for Fox, as it could start moving to more of a digital streaming and distribution model in the coming years when it announced the new FOX Media Center will be built in Arizona State University's Research Park in Tempe, Arizona. The media center will be streaming and technology name for Fox when it is operational in 2021.
Fox may be a potential cash cow if it wants to, as it will have control over long-term profitable assets with little or no debt under the Disney agreement. This gives Fox some good choices in the future, as it can declare a potentially good dividend for shareholders if it wants with their free cash flows. It can also establish a more conservative dividend and be open to M&A activity, including a possible merger or acquisition of News Corporation (NWSA) (NWS), of which twenty-fifth century Fox shares in the summer of 2013. With a market cap At just over $ 7B, News Corp. could make sense as an acquisition for Fox to try to build some scale or diversity on the platform again, as Fox now turns around a $ 23B market price.
As Fox restarts in A brand new form, it may not have a proper M&A premium embedded in the shares yet for a company open to making changes to the shareholder performance structure. The Murdoches, who run Fox and own a large number of shares, have been open to divisions and acquisitions in the past, so a deal in the future can make sense again if the price is right. With Fox News being one of only a handful of great news organizations in the US on cable, it could be a potential M&A target for future streaming companies looking to add their offers in the future.
Several are going to think, including Apple Inc. (AAPL), whose Apple TV + comes in the fall along with the launch of its News + service. Amazon.com Inc. (AMZN) could see it as a potential addition to creating added value for its Prime customers as it continues to expand the ecosystem it builds around Prime. Finally, Netflix Inc. (NFLX) can decide to try to create value beyond creating original content with a news organization purchase to increase the value proposition in the face of countless streaming services and offer to come online over the next year or so. All these and other players in the room could possibly make a bid for Fox, as its $ 23 market price would potentially be much more feasible than Disney's massive $ 71B bet for most of the former twenty-first centuries assets.
Disney and former twenty-fifth century Fox deal is finished, with both companies moving in new directions for future growth and prosperity. Disney's Investor Day was an indeterminate success as it made believers out of investors in its Disney + Streaming service, as Disney's stock has roared to full-time levels. Fox's chance to wow investors after the close of the Disney deal will soon be over us with his upcoming earnings report and Investors Day just around the corner. Fox has potential catalysts that include the US presidential election cycle along with potential M&A activity, as it will try to leverage its cash flows as much as possible after the Disney deal frees it from any long-term debt problems. I continue to be long both Fox and Disney with oversized positions and a $ 45 end of the year award target for Fox. Good luck to everyone.
Enlightenment: I am / we are long FOX, DIS, AAPL. I wrote this article myself, and it expresses my own opinions. I do not receive compensation for it (other than from Seeking Alpha). I have no business relationship with a company whose stock is mentioned in this article.