Twenty-First Century Fox, Inc. Class A (NASDAQ:FOXA) March 13, 2015

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FOXA-US
Implied Price
UNDERVALUED
31.01 39.27
A Price as of Close Mar 12 34.58 USD
B CapitalCube Median Implied Price 36.40 USD * CapitalCube Price is over trading range * CapitalCube Price is below trading range
CapitalCube Estimate Range 34.88 - 37.91 USD NA
52 Week Range 31.01 - 39.27 USD
Earnings Momentum Score
 0  100
A Earnings Score (FOXA) 63.24
B Earnings Score(Peer Median) 32.47
Latest Filing date December 31, 2014
Fundamental Score
 0  100
A Fundamental Score (FOXA) 53
B Fundamental Score(Peer Median) 53
Dividend Score
 0  100
A Dividend Quality Score (FOXA) 100
B Dividend Quality Score (Peer Median) 75
Dividend Yield
0.80 3.76
A Dividend Yield (FOXA) 0.80
B Dividend Yield (Peer Median) 1.16
Analysis
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Fundamental Analysis

Capital Investment Strategy The company's capital investment program suggests it is under-investing in a business that is producing peer median returns.

The company's capital investment program suggests it is under-investing in a business that is producing peer median returns.

Earnings Leverage Changes in annual revenues (relative to peers) are better than the change in its earnings (relative to peers), implying the company is focused more on revenues. Revenues Focus

Revenues Focus: Companies where the yearly Revenue Growth is above peer median while Net Income Growth is below peer median suggesting that the company is focused on revenues.
Changes in annual revenues (relative to peers) are better than the change in its earnings (relative to peers), implying the company is focused more on revenues.

Leverage & Liquidity FOXA-US has additional debt capacity.

FOXA-US has additional debt capacity.

Relative Valuation Twenty-First Century Fox, Inc. Class A's current Price/Book of 3.45 is about median in its peer group.

Twenty-First Century Fox, Inc. Class A's current Price/Book of 3.45 is about median in its peer group.

Valuation Drivers We classify FOXA-US as Harvesting because of the market's relatively low growth expectations despite its relatively high returns. Harvesting

Harvesting: Companies with higher Operating Advantages (ROE) but lower Growth Advantages (P/E) usually suggests a focus on current operating results at the expense of long-term opportunities, so they are "Harvesting" out profits.
We classify FOXA-US as Harvesting because of the market's relatively low growth expectations despite its relatively high returns.

Drivers of Margin The company's median gross margin and relatively high pre-tax margins suggest non-differentiated product portfolio but with tight cost control relative to peers. Commodity; Low Cost

Commodity; Low Cost: No pricing power or commodity type products/services, coupled with cost efficient operations, as demonstrated by Company Gross margins that are below peer median, but Pretax margins that are above peer median.
The company's median gross margin and relatively high pre-tax margins suggest non-differentiated product portfolio but with tight cost control relative to peers.

Growth Expectations While FOXA-US's revenues growth in recent years has been around the peer median, the stock's below peer median PE ratio suggests that the market likely sees the company's long-term growth prospects to be fading.

While FOXA-US's revenues growth in recent years has been around the peer median, the stock's below peer median PE ratio suggests that the market likely sees the company's long-term growth prospects to be fading.

Operations Diagnostic FOXA-US has relatively high profit margins while operating with median asset turns.

FOXA-US has relatively high profit margins while operating with median asset turns.

Sustainability of Returns Over the last five years, FOXA-US's return on assets has improved from median to better than the median among its peers, suggesting the company has found relative operating advantages.

Over the last five years, FOXA-US's return on assets has improved from median to better than the median among its peers, suggesting the company has found relative operating advantages.

Likely Corporate Actions

Dividend Action

While FOXA-US has a high quality dividend and a strong cash cushion, its relative operating performance is not strong enough to suggest an increase in the dividend.

Equity Action

The company's current share price is not sufficiently lower than its 52-week high (currently about 11.96% below) and does not justify a share buyback as the best use of cash at this time.

M&A Action

While FOXA-US has the size (by book value) to acquire other firms within this peer group and may need to do so to meet the market's growth expectations, it may not be able to add more goodwill to the balance sheet.

Dividend Quality

Dividend Coverage Strong

The ending cash balance, with a dividend coverage of 12.10x, provides a substantial cushion in case of a significant reduction of cash flows in the future.

Dividend Quality High Quality

High Quality: Dividends that are fully covered from operating and investing cash flow, net of any cash outflow from debt repayments and net of a decrease in deposits (for banks) are considered to be high quality. For more information, please refer to the Corporate Actions report.
Over the last twelve months (prior to December 31, 2014), FOXA-US paid a high quality dividend, which represents a yield of 0.80% at the current price.

Dividend Quality Trend Consistent High Quality

Consistent High Quality: Over the last 5 years, all dividends paid by the company were of high quality. For more information, please refer to the Corporate Actions report.
Dividends paid during each of the last five years were consistently of high quality.

Accounting Red Flags

Accounting Quality Aggressive Accounting

Aggressive Accounting: Company's Net Income margin is higher than peer median while the percentage of Accruals is lower than peer median. Usually indicative of a Company with an aggressive accounting policy.
FOXA-US's relatively strong net income margin for the last twelve months combined with relatively low accruals suggest possible aggressive accounting and an overstatement of its reported net income.

Management of Reserves Strong Drain

Strong Drain: Company's percentage of Accruals is below zero and lower than peer median -- usually indicative of a Company draining its Reserves in a strong manner relative to peers.
The company's accrual levels over the last twelve months are both negative and less than the peer median, which suggests that not only is the company draining reserves but is doing so more strongly compared to its peers.

Material Categories

Excluding the effects of change in revenue, the accounting categories causing the most impact on the movement of net income from the prior period to the current period are PP&E, Accounts Payable and Accounts Receivable.
Characteristics
Key Valuation Items

Price to Book (P/B)

3.45

Price to Earnings (P/E)

7.90

Price to Sales

2.25

Price / EBITDA

10.53

Price to Assets

1.40

Price / FCF

27.66

EV / EBITDA

13.24

EV / FCF

34.79

Dividend Yield

0.80

PEG Ratio

0.08
Profitability

Gross Margin

33.98

EBIT Margin

18.14

Net Margin

28.53

FCF Margin

8.15

Operating Margin

18.14

Pre-Tax Margin

33.27

ROE

43.61

ROIC

24.67

ROA

17.56
Efficiency

Debt / Equity

89.66

Debt / Market

23.36

Debt / Book

Debt / EV

20.69

Coverage Ratio

24.39

Interest Coverage

4.86

Cash Days

82.32

Working Cap. Days

113.41

Receivable Days

73.28

Payable Days

24.93

Inventory Days

37.00

Sales / Assets

0.62
Growth

Earnings Growth YOY

66.67

Revenue Growth YOY

1.98

Oper. CF Growth YOY

26.72

EPS Growth YOY

100.47

FCF Growth YOY

33.03
Price History

Peers

FA Score

DQ Score

close

52 week range

84.57

59.86

88.13

USD

107.17

76.31

107.33

USD

61.65

48.83

67.22

USD

69.71

63.11

89.76

USD

36.06

25.53

36.08

USD

21.66

16.58

22.15

USD

1,065.12

645.93

1,066.39

USD

Company Profile

21st Century Fox, Inc. operates as a global media company, which engages in television broadcasting and film production. It operates through five segments: Cable Network Programming, Filmed Entertainment, Television, Direct Broadcast Satellite Television and Other, Corporate and Eliminations. The Cable Network Programming segment consists of the production and licensing of programming distributed through cable television systems and direct broadcast satellite operators primarily in the U.S., Latin America, Europe, and Asia. The Filmed Entertainment segment engages in the production and acquisition of live-action and animated motion pictures for distribution and licensing in all formats in all entertainment media worldwide and the production and licensing of television programming worldwide. The Television segment consists of the broadcasting of network programming in the U.S. and the operation of broadcast television stations. The Direct Broadcast Satellite Television segment engages in the distribution of basic and premium programming services via satellite and broadband directly to subscribers in Italy. The Other, Corporate and Eliminations segment consists of corporate overhead and eliminations and other businesses. News Corp. consists of the businesses spun off by the old News Corp. (now known as 21st Century Fox) which include newspapers, information and digital marketing services, digital real estate services, book publishing, digital education and sports programming and pay-TV distribution in Australia. The company was founded on June 28, 2013 and is headquartered in New York, NY.

Closing Stock Price

USD 34.575

As of Date

March 12, 2015

One Year Performance

5.7663%

One Month Performance

0.479519%

Industry Group

Media Conglomerates

52 wk. Range

USD 31.01 - USD 39.27

Market Cap (Millions)

USD 73511.3

Total Shares Outstanding

2131.7859
Latest Filing Dates

Annual

June 30, 2014

Semi Annual

N/A

Quarterly

December 31, 2014

Next Release Date

May 6, 2015

Filing Currency

USD

Listed Exchange

NASDAQ
Peers


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Darin Sobool
4h
Gotta love how media companies drop almost 3%, even though the price drop in oil has no correlation whatsoever to that sector...$VIAB $FOXA
Mar 13 5:59 PM
Insider Monkey
1d
$FOXA & $MA Among Chase Coleman’s Largest Holdings for Long Haul http://stks.co/c1soy
Mar 12 6:23 PM
Tom Lydon
2d
Street One Financial - ETF Chart of the Day: Buyback Bonanza http://stks.co/h1x9m $QCOM $AAPL $HD $IBM $BA $FOXA $PKW $VTI
Mar 11 6:59 PM
Capital Market Laboratories
3d
$FOXA Assets and Stock Buy-backs Trends #CML http://stks.co/q1feF
Mar 10 8:38 PM
Capital Market Laboratories
3d
How the Option Market Prices Risk for Media http://stks.co/p1fdp #CML - $DIS $CBS $FOXA $AMC $TWC $WWE
Mar 10 3:15 PM
Analyst Ratings Network
3d
Analysts Give Average Rating of Buy to Twenty-First Century Fox $FOXA http://stks.co/c1rln
Mar 10 1:8 PM
Capital Market Laboratories
3d
$FOXA Return on Assets Trend #CML http://stks.co/d1reU
Mar 10 11:36 AM
Capital Market Laboratories
4d
$FOXA Gross Margin Trend #CML http://stks.co/b1rQs
Mar 10 12:50 AM
Capital Market Laboratories
4d
Mar 9 10:0 PM
Ophir Gottlieb
4d
$FOXA Revenue and Gross Margin Trends #CML http://stks.co/t1fKX
Mar 9 8:39 PM
Ophir Gottlieb
4d
Largest Return on Assets - 1 $FOXA (11.8%) 2 $GILD 3 $SBUX 4 $AAPL (6.9%) <- Whoa 5 $BIIB 6 $MA All Chart --> http://stks.co/q1f5a
Mar 9 7:28 PM
1
Ophir Gottlieb
4d
Option Market Price Risk for Media http://stks.co/b1rHh - $DIS $CBS $FOXA $AMC $TWC $WWE
Mar 9 7:6 PM
1
Ophir Gottlieb
4d
How the Option Market Prices Risk for Media http://stks.co/p1fBf - $DIS $CBS $FOXA $AMC $TWC $WWE
Mar 9 4:45 PM
Capital Market Laboratories
4d
$FOXA Earnings and Gross Margin Trends #CML http://stks.co/b1r4R
Mar 9 11:7 AM
Ophir Gottlieb
6d
How the Option Market Prices Risk for Media http://stks.co/j1vdK - $DIS $CBS $FOXA $AMC $TWC $WWE
Mar 7 8:20 PM
1
Capital Market Laboratories
6d
$FOXA Assets Trend #CML http://stks.co/j1vYs
Mar 7 11:39 AM
Pristine Trading
7d
$FOXA looking to roll over...
Mar 6 5:54 PM
Jason
7d
$LL Sustain Its Loss on Allegation as $FOXA $BA on Active Notes http://stks.co/a1qYJ
Mar 6 2:9 PM
Capital Market Laboratories
8d
$FOXA Assets and Return on Assets Trends #CML http://stks.co/f1v4L
Mar 6 5:33 AM
Capital Market Laboratories
8d
$FOXA Revenue and EPS Trends #CML http://stks.co/q1e1p
Mar 6 5:13 AM
WallStreetConsensus
8d
Initiations 3/5 $CLDN , $CTSO , $EKSO , $ZSAN , $NBR , $ASC , $DM , $EXH , $STNG , $KAR , $FOXA , $TWX , $JIVE , $MYL , $VIAB , $ENDP http://stks.co/h1v6X
Mar 6 1:45 AM
Ophir Gottlieb
8d
Largest Return on Assets - 1 $FOXA (11.8%) 2 $GILD 3 $SBUX 4 $AAPL (6.9%) <--- Whoa 5 $BIIB 6 $MA All Chart --> http://stks.co/q1dxz
Mar 5 11:54 PM
1
Finances Stock releases
8d
$FOXA 21st Century Fox Names Michael Petrie Vice President, Investor Relations http://stks.co/a1qCl
Mar 5 6:4 PM
Jason
8d
Deutsche Bank Thinks Big Media Growth Will Continue Despite Ratings Drop $CBS $DIS $FOXA $TWX $VIAB $LMCA $SIRI http://stks.co/q1dlF
Mar 5 5:23 PM
TheStreet
8d
Twenty-First Century Fox (FOXA) Stock Rated New 'Buy' Today at Deutsche Bank $FOXA http://stks.co/s1dKt
Mar 5 1:34 PM
Analyst Ratings Network
8d
Twenty-First Century Fox initiated by Deutsche Bank at buy. http://stks.co/g1uNi $FOXA
Mar 5 12:25 PM
SIAnalystWire
8d
Deutsche Bank Starts 21st Century Fox ($FOXA ) at Buy http://stks.co/c1q02
Mar 5 12:14 PM
Capital Market Laboratories
8d
$FOXA Revenue and Earnings Trends #CML http://stks.co/q1dY1
Mar 5 12:12 PM
Capital Market Laboratories
8d
$FOXA Revenue and Operating Margin Trends #CML http://stks.co/d1pvx
Mar 5 11:48 AM
Capital Market Laboratories
8d
$FOXA Revenue Trend #CML http://stks.co/p1dkI
Mar 5 9:56 AM
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Closing Stock Price

USD 34.575

As of Date

March 12, 2015

One Year Performance

5.77%

One Month Performance

0.48%

Industry Group

Media Conglomerates

52 wk. Range

USD 31.01 - USD 39.27

Market Cap (Millions)

USD 73,511.3

Total Shares Outstanding (Millions)

2,131.79
Latest Filing Dates

Annual

June 30, 2014

Semi Annual

N/A

Quarterly

December 31, 2014

Next Release Date

May 6, 2015

Filing Currency

USD

Listed Exchange

NASDAQ
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