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News Corp. (NWS) has been traveling in a super-tight range over the past 12 months. The 52-week low is $13.21 while the 52-week high is $18.80. Wednesday, the shares closed the regular session at $16.44, but during the extended-hours period, the stock shot up over 3% to $16.99. This was in response to the media conglomerate's fiscal first-quarter report.Look at the chart. It isn't so hot. It basically is telling you that there isn't a lot of room for error. Buy too high in the range and you could be in for an obligatory round of dollar-cost-averaging. Besides that, there are worries tied to the state of the economy, the quality of the advertising business, the change in digital-distribution strategies, etc. It isn't easy being a content producer these days.
News Corp. did okay in Q1. The adjusted profit of 27 cents per share was three pennies ahead of the consensus estimate. According to the press release, cash flow did take a dip: It went from $680 million to $499 million. It's just the first quarter, though; we'll see what happens as the rest of the year progresses. Standout operating segments included cable network programming and television; they experienced nice jumps in terms of income generation.
The stock hasn't done much since I wrote about the fourth-quarter results. I don't feel it's a buy right now. My instinct tells me that if the equity experiences a significant amount of buying during Thursday's regular session, then traders should consider booking some gains.
I think News Corp. obviously has a high quantity of future potential (although I also think that management needs to step up its game when the subject of producing programming at a lower cost comes up), so you certainly could consider it a candidate for investigation as a long-term holding. Realize, though, that you may have to wait a while for the company to break out of its range.
Disclosure: I don't own any company mentioned; positions can change without notice.
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