Author Topic: FOXA - Twenty-First Century Fox Inc  (Read 26550 times)

walkie518

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Re: FOXA - Twenty-First Century Fox Inc
« Reply #50 on: September 20, 2019, 09:28:36 AM »
pricing looks pretty good here for FOXA ... anyone have a sense for the recent decline or has recent price action been largely driven by market forces?


Spekulatius

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Re: FOXA - Twenty-First Century Fox Inc
« Reply #51 on: September 20, 2019, 03:19:16 PM »
pricing looks pretty good here for FOXA ... anyone have a sense for the recent decline or has recent price action been largely driven by market forces?

I like it enough and rebought some of my recently sold shares. It seems like the whole content/media sector has been weak (CBS, NFLX, DISCA) and FOX didnít escape the wrath of Mr Market.
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walkie518

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Re: FOXA - Twenty-First Century Fox Inc
« Reply #52 on: September 20, 2019, 05:13:26 PM »
pricing looks pretty good here for FOXA ... anyone have a sense for the recent decline or has recent price action been largely driven by market forces?

I like it enough and rebought some of my recently sold shares. It seems like the whole content/media sector has been weak (CBS, NFLX, DISCA) and FOX didnít escape the wrath of Mr Market.

somehow, FWONA dodged the bullet ... DISCA might be worth add'l consideration, though I'd want a better price before buying?

First legs down appear around the same time, but NFLX might have decoupled from CBS/VIA/FOX...

there is certainly some effect from sector/industry price correlation, but likely the CBS/Viacom deal is weighing on those stocks while FOXA is more a matter of uncertainty regarding capital allocation decisions?

Spekulatius

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Re: FOXA - Twenty-First Century Fox Inc
« Reply #53 on: September 20, 2019, 05:25:28 PM »
pricing looks pretty good here for FOXA ... anyone have a sense for the recent decline or has recent price action been largely driven by market forces?

I like it enough and rebought some of my recently sold shares. It seems like the whole content/media sector has been weak (CBS, NFLX, DISCA) and FOX didnít escape the wrath of Mr Market.

Hard to tell what causes these share price oscillations. There was some concern about their purchases and then the stock bounced back, presumable because of a Murdoch insider buy. In the end, more noise than Signal and I disposition accordingly. I like FOX because  I believe their have a franchise on news for conservatives  and because their whole business around love content is Netflix resilient. their balance sheet looks way better than CBS/VIA or DISCA (which is worth consideration as well, because of the  high FCF yield).

somehow, FWONA dodged the bullet ... DISCA might be worth add'l consideration, though I'd want a better price before buying?

First legs down appear around the same time, but NFLX might have decoupled from CBS/VIA/FOX...

there is certainly some effect from sector/industry price correlation, but likely the CBS/Viacom deal is weighing on those stocks while FOXA is more a matter of uncertainty regarding capital allocation decisions?
Life is too short for cheap beer and wine.

Foreign Tuffett

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Re: FOXA - Twenty-First Century Fox Inc
« Reply #54 on: September 27, 2019, 08:21:33 AM »
Some people are taking issue with Lachlan's pay:

https://www.businessinsider.com/lachlan-murdoch-ceo-pay-after-disney-fox-sale-2019-9

I take issue with Lachlan's pay too. He should be paid zero, as he shouldn't be the CEO to begin with. Lachlan's only real qualifications are (1) he's Rupert's son and (2) his brother James is too politically liberal to lead a company that owns Fox News.





Okonomen

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Re: FOXA - Twenty-First Century Fox Inc
« Reply #55 on: September 27, 2019, 03:38:33 PM »
Agree that they are wel-paid. Will be interesting to see the next proxy

brycepeterson

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Re: FOXA - Twenty-First Century Fox Inc
« Reply #56 on: September 27, 2019, 04:08:44 PM »
Looks like good risk vs. reward to me here.  $31.50 share price, enterprise value about  $23.5 billion, should do around $1.6-$2.0 billion free cash flow per year.  You don't find too many FCF / EV yields in that range anymore, especially given the business quality for FOX is pretty good.  My main worry is if the CEO uses free cash flow poorly.  I don't like the latest acquisition, but I also don't fully understand it.  Seems like all FOX has to do to move the stock from low $30's to $40-$45 is generate that $1.6-$2.0 billion free cash flow and buyback a ton of stock at reasonable valuations.  I'm not sure if CEO has a brain / understands this.

Also note - Disney has come down lately from $140 to $130.  Maybe there's just general weakness in media/tv/consumer stocks?

Spekulatius

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Re: FOXA - Twenty-First Century Fox Inc
« Reply #57 on: September 27, 2019, 04:47:13 PM »
Looks like good risk vs. reward to me here.  $31.50 share price, enterprise value about  $23.5 billion, should do around $1.6-$2.0 billion free cash flow per year.  You don't find too many FCF / EV yields in that range anymore, especially given the business quality for FOX is pretty good.  My main worry is if the CEO uses free cash flow poorly.  I don't like the latest acquisition, but I also don't fully understand it.  Seems like all FOX has to do to move the stock from low $30's to $40-$45 is generate that $1.6-$2.0 billion free cash flow and buyback a ton of stock at reasonable valuations.  I'm not sure if CEO has a brain / understands this.

Also note - Disney has come down lately from $140 to $130.  Maybe there's just general weakness in media/tv/consumer stocks?

Yes, the media sector has been weak, CBS/Viacom, DIS, NFLX, DISCA have all been weak lately. I like FOX focus on live programming, which means Netflix is not a competitor. They also own news for the conservative viewers (or infotainment) and Fox Sports is pretty good and way cheaper than ESPN.
« Last Edit: September 30, 2019, 03:05:36 PM by Spekulatius »
Life is too short for cheap beer and wine.

Okonomen

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Re: FOXA - Twenty-First Century Fox Inc
« Reply #58 on: September 28, 2019, 12:25:37 AM »
The proxy came out on Sep 23

Rupert Murdoch base salary: 5 mUSD (chairman/executive)
Lachlan Murdoch base salary: 3 mUSD (CEO) - 85% of total compensation is variable/at risk

ST cash incentive based on: EBITDA (terrible metric in my opinion) 75% and 25% individual performance

LT incentive: 40% FCF, 40% EPS, 20% relative 3 year TSR

Little excessive to pay the chair more than the CEO especially when he owns so much of the company. I also would have liked to see a capital return metric be more dominant even though the LT's are not terrible metrics, but you risk mgmgt to chase bottom line without regards to reinvestment returns on capital, and FCF focus motivates macimizing cash flows but also maybe neglecting critical CapEx.

Target payout to Rupert and Lachlan is 10,5 and 8 mUSD (21 and 16 mUSD max)

I notice the item "Personal Use of Corporate Aircraft" was 175.000 USD for Lachlan and 85.000 for Rupert...

I notice on p40 that the value of vested options for Lachlan is 44 mUSD in 2019... Sounds extreme compared to shareholder returns

Lachlan's direct ownership in common stock is around 154.000 units worth 5 mio. USD currently. Doesnt seem like a lot. The guideline for Lachlan is 5x base salary = 15 mUSD. With all the options etc he is albeit very inventivized to increase EPS, FCF and shareholder returns he just doesnt have that much downside

In general I'm a little disappointed, but didn't really expect that much due to the ownership structure. Seems like they are showering themselves with options

Any opinions on their remuneration policy 2019 ?

brycepeterson

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Re: FOXA - Twenty-First Century Fox Inc
« Reply #59 on: September 30, 2019, 01:31:47 PM »
Apologize if this has been covered lately - one observation I have of the businesses I own shares in is "in general" - they move on a daily basis with their sub-sector (close comparables, like TV/content owners for FOX), or bigger industry (like "consumer discretionary" for FOX).  My guess is indexing + sector funds buy/sell indiscriminately, thus you get daily selling or buying in TV/content owners and they all appreciate or fall together (FOX, DIS, CMCSA, etc.).  I've been wondering if this dynamic has pushed FOX down from call it $34 to $31?  The free cash flow I think it will produce doesn't justify this move down - thus I've been thinking it's sector/industry ETF/index fund selling vs. anything specific to FOX.

The big banks follow this trend. They'll move independently on unique events / news such as earnings announcements, Wells Fargo was +4% on the CEO announcement last week, etc.  But if you follow them during the routine days, I think they move fairly close together up or down.  Sometimes I think this creates buying opportunities.  (Probably FOX today.)