Munger Mode rating: 4 out of 5 — Buy. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
Charlie and I have spent considerable time studying News Corp, and we find ourselves in the curious position of looking at a company the market seems unable to properly value. The consolidated entity trades at roughly $13 billion, yet its 61.4% stake in REA Group alone is worth approximately $8.6 billion. This means the market is assigning roughly $4.4 billion to a collection of businesses that includes the Wall Street Journal, Dow Jones's Professional Information Business, HarperCollins Publishers, Realtor.com, and a portfolio of news mastheads — businesses that collectively generated over $1.4 billion in segment EBITDA last fiscal year and are growing. That arithmetic, as Charlie would say, is so simple even an English major could do it.
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