News Corp.: Most Undervalued Stock Is Now a Buy

The same is true across the board. Fox is copying the other studios with a range of Fox-based cable networks, like FX and Fox Movie Channel, which it can load free with shows from its library. All that cash flows down to the bottom line.

Fox can do with its sports channels the same thing ESPN has done with its sports channels -- you do know that sports represents about 40% of your cable bill? Well, ESPN has figured a way to get a cut of your Internet bill, too, as Frank DeFord explained recently for NPR. Fox can copy that. Again, ka-ching.

With the print publishing gone, Fox can make another run at the rest of BskyB, maybe even acquire News Corp.'s Dish Network (DISH). That's more distribution for existing programming, guaranteed carriage for the new Fox cable networks, plus a cut of every other studio's action. Also, they could kill Dish's ad-skipping technology, as described by Bloomberg.

Assuming the new company (I'll call it Fox Inc.) learns these lessons about the key being distribution, it can make another run at the Internet, using the sports model, and find even more money, with very little effort. The Fox name, it has been said, stems from William Fox, a Hungarian-born entrepreneur who was seeking the same synergies when the Great Depression intervened.

With both Rupert and James Murdoch discredited in the phone tapping scandal, detailed last year by the BBC, Chase Carey is going to be running this company and -- perhaps more important -- he'll likely choose his own successor. That successor will be someone from the movie or TV or cable business, and if that person is not named Murdoch, the stock is going to get another jolt of rocket fuel. The Murdoch family will be left licking wounds but counting money, not a bad trade.

For all these reasons, NWS is the most undervalued stock in the market right now. But if you don't want to hear about it, that's fine, too. More profit for me.

At the time of publication, the author had no investments in the companies mentioned in this article.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Follow @DanaBlankenhorn

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