Murdoch redesigned the Wall Street Journals website to help boost subscription revenue by a target of more than $300 million a year. Hes also expanding the cable and interactive units while US advertising is in a slump. News Corp is at its cheapest ever, based on the price- earnings ratio and measures of cash flow and leverage, Sini said. The P-E of 10.3 will rise in the next six months with the start of an economic recovery and eventually reach the high teens, he said. Quantitative money managers including Analytic Investors LLC in LA have bought the shares. Its looking cheaper on a valuation basis in terms of earnings yield and cash flow-to-price, said Gregory McMurran, chief investment officer at Analytic, which has more than $11 billion under management. His firm bought more than 9 million shares in the second quarter, according to Bloomberg data.
Earnings yield is per-share profit divided by the stock price. News Corp launched the new WSJ.com website and the luxury-lifestyle magazine WSJ as well.
The Journal, WSJ.com and Dow Jones were grossly undersold, Murdoch said at a conference in New York. News Corp also is relying on cable networks such as Fox News, Sky Italia and the Fox Interactive Media group that includes MySpace to counter weakness in advertising at newspapers and local television stations. I hope theyre right, Murdoch said of some investors view that News Corp is near a bottom. Mutual funds Dodge & Cox and Capital World Investors are the top investors, while hedge funds including Chris Shumways Shumway Capital Partners LLC, Richard Perrys Perry Corp and Leon Coopermans Omega Advisors Inc were sellers. Murdochs long-term strategy is one hes exhibited over the last decadeto bolster and diversify himself, Sini said. Theyre not getting credit for what theyre doing.