NEW YORK (
-- News Corporation
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, reasonable valuation levels, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- Despite currently having a low debt-to-equity ratio of 0.55, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that NWSA's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.00 is high and demonstrates strong liquidity.
- NEWS CORP's earnings per share declined by 25.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NEWS CORP turned its bottom line around by earning $0.97 versus -$1.29 in the prior year. This year, the market expects an improvement in earnings ($1.12 versus $0.97).
- 35.50% is the gross profit margin for NEWS CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.70% trails the industry average.
- Compared to its closing price of one year ago, NWSA's share price has jumped by 32.18%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
News Corporation operates as a diversified media company worldwide. The company has a P/E ratio of 15.6, equal to the average media industry P/E ratio and below the S&P 500 P/E ratio of 17.7. News has a market cap of $32 billion and is part of the
industry. Shares are up 21.6% year to date as of the close of trading on Friday.
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