Main reasons why I find News Corp interesting

News Corp continues to be under the radar, which creates an opportunity for this big cap (market cap of 19 bn).

One of the difficulty with News Corp : it is more well known for its struggling businesses (newspapers, Foxtel) than for their successful businesses (digital real estate in Australia and the US, publishing business and Dow Jones division).
However, their struggling businesses now represent a smaller part of their results.
Last quarter, News Media and Subscription Video represented together only 26 % of their total EBITDA (before the "other" division).

News Media and Subscription Video
While these 2 divisions had a decrease of their adjusted revenues last Q, they were able anyway to increase the adjusted EBITDA.
Going forward, the weight of these 2 divisions will probably continue to shrink for two reasons :
- acquisitions focused on the 3 other divisions (see their last 3 acquisitions),
- News Corp do not hesitate to reduce the exposure to the struggling businesses, by closing some newspapers and largely decreasing Foxtel Capex.

Large success for their other divisions
Among the other divisions, there are mainly 4 stories.
REA is well known. There also 3 other stories which are less well known : Move, Dow Jones and Harper Collins.
These 3 businesses are now showing a regular increase of their revenues and a significant rebound of their profit.

Move (realtor.com)
Move is the n.2 in the US for real estate classified behind Zillow.
It is now showing strong top line growth (+ 37 % vs + 28 % in Q2), which is translated in better EBITDA for the whole division. During the last 2 quarters, Move's growth explained 80 %+ of the EBITDA growth for their digital real estate division.

Dow Jones (DJ)
Main businesses in this division : Wall Street Journal, Barron's, Market Watch and DJ Risk and Compliance.
Despite the struggling newspaper and ad markets, DJ continues to do very well thanks to its focus on digitalisation and subscription.
The company estimates that 75 % of their revenues in this division are recurring.
One of the best asset in this division is their Risk and Compliance business which had 20 quarters of double digit growth (in September 2020).
During the last quarter, DJ increased its adjusted revenues by 5 %, which led to a 59 % increase of their EBITDA thanks also to a strong cost control.

Harper Collins
This is now showing a significant top line (+ 15 % adjusted during the last quarter, after + 19 % during the quarter before) which translated into + 43 % for adjusted EBITDA thanks to a large operating leverage.
It is supported by digital sales (+ 38 % during last quarter).
The increase of Harper Collins reflects the growth for the industry.
It is also quite broad base between old and new titles and is driven by different book categories.