Southeastern's Newest Big Bet: News Corp.
Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
Stocks have had terrific momentum so far in September, with seven straight sessions of gains bringing the month-to-date return for the S&P 500 to 3.4%. This morning, the indexes are roughly unchanged: The S&P 500 and the narrower, price-weighted Dow Jones Industrial Average have moved less than 0.1% each as of 10:05 a.m. EDT.
Southeastern Asset Management has become the largest external holder of media group News Corporation's voting shares, with an 11.9% position (the Murdoch family has 39.4% of the votes). The company is newly spun off from the Murdoch empire's entertainments assets, which are now housed under Twenty-First Century Fox, as a result of a phone-hacking scandal.
The Financial Times notes that Southeastern disclosed its position on a form reserved for passive investors, which suggests it does not intend to agitate for change. However, the value manager has shown itself willing to take on a more active role in specific situations in the past, including at Chesapeake Energy, where it had a hand in the removal of CEO Aubrey McClendon.
Not all of the fund manager's campaigns have been successful, however. In fact, the board of PC maker Dell looks set to finalize a Southeastern defeat today with a shareholder vote approving a going-private transaction by Michael Dell and Silver Lake. Southeastern and Carl Icahn believe the acquisition undervalues the company and had put together a rival proposal. Nevertheless, Southeastern is an old-school value boutique, so value-oriented investors may wish to kick the tires of News Corporation on the basis of the fund manager's interest.
It's not just activist investors that Mr. Murdoch should look out for as competition in the media and entertainment landscape heats up. Americans reportedly spend nearly 34 hours a week watching television. With television viewing taking up almost as much time as the average work week, the potential for profits in the space is enormous. The Motley Fool's top experts have created a new free report titled "Will Netflix Own the Future of Television?" The report not only outlines where the future of television is heading, but offers top ideas for how to profit. To get your free report, just click here!
The article Southeastern's Newest Big Bet: News Corp. originally appeared on Fool.com.
Fool contributor Alex Dumortier, CFA has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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