Have you checked News Corp.'s (NYSE: NWS) stock price lately? It's pretty close to the 52-week low. Last Thursday, before the Fourth of July holiday began, News Corp.'s shares closed at $14.76. The 52-week low is $14.58, and the 52-week high is $24.95. As can be seen, it's had quite a fall. And what about competitor Viacom (NYSE: VIA)? The company's stock closed on Thursday with a price of $29.70. That was, in fact, the 52-week low. The 52-week high for Viacom is $44.95. Again, a pretty big dive.
Is it time to enter these two names? From a valuation perspective, considering their growth prospects, the stock prices do make one pause for consideration. They seem cheaper than colleagues Disney (NYSE: DIS) and Time Warner (NYSE: TWX) from certain angles, although the latter two media businesses do have higher dividend yields. But with the big decline in the stock prices, traders certainly have to be looking at them as perhaps candidates for a bounce-back in the second half of the year, especially if the oil situation improves.
I think that's the big problem here. With oil and financials acting in negative ways for the economy, the entire market is one huge growling bear in a bad mood. And that has made me very reticent about initiating a trading position in either News Corp. or Viacom, though I really, really am interested in doing so. I think value trades like this might very well simply be tests of patience at this point. I sense that both these stocks will be higher by the end of the year, but so what? These stocks will probably merely move along with the rest of the major averages, and that movement could be in the downward direction. And News Corp. has been having issues with MySpace.
I think I'll ignore News Corp. and Viacom for the time being, but I will be keeping an eye on them. Yes, their current prices do make one think, but then the market action comes to mind, putting a damper on any positive thoughts.
Disclosure: I own Disney; positions can change at any time.
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Reader Comments (Page 1 of 1)
7-05-2008 @ 11:15PM
Robert said...
Any American who would stand by and let Viacom push google users and steal through shady courts needs to examine their profolio. Sell Viacom. They support fascism ideals, and care not about privacy in these United States. Also the judge should be removed from the courts for letting this ruling against Google stand. WTF. The people will speak to these crimes next year. The party is over.
7-06-2008 @ 9:44AM
Robert said...
A strong signal needs to be sent and with a postage stamp marked SELL Viacom! Only need to watch YouTube for a few minutes and it will be apparant that the MTV mega media giant wants to have more that their old movie clips and hacked 80s junk removed, but also everyones IP address. Well thats close to the color of my underware and thats none of your bussiness guys! The judge who allowed this ruling for viacom to extract IP addresses for the sake of slapping some vloggers around is so backwards and facist. Sell your stock in this company and tell Viacom that it would serve them better to put out better movies and stop showing crap on cable. The Judge in question also needs to be examined closely. Maybe post his address on a vlog so we can drive over to his house and let him know that privacy is an important right; or did he miss that class back in the 40's?
7-06-2008 @ 10:28AM
henry10 said...
Viacom is playing a losing game and driving away the very consumers it seeks to attract. Why not cut a deal with Google and move on? Why continue to waste resources protecting business models that no longer work? From a once vibrant, cutting-edge company, it has turned into a stick in the mud, and its stock price continues to suffer for it.
7-07-2008 @ 3:50PM
Jessy S. said...
I see Viacom being taken over by Google in the short run. Something has to be done in order to keep the markets happy and a Google taking over Viacom will make everybody happy.
Meanwhile, News Corp should just sell Dow Jones and company back to the original owners.
7-07-2008 @ 6:46PM
zeracore said...
something tells me that the Viacom executive that got the idea to sue youtube is going to git fired
one the Bord of deracter's (or however runs viacom )figurers out that making the youtube users mad is not a good idea.
especially one their stock are doping do to a global boycott of there company and all company that Viacom owns
and there is enough people toking boycott to make it happen