Is Print Dead, or Will These Spinoffs Be Great Investments? – News Corp (NWS), Time Warner Inc (TWX)

Page 1 of 2

Typically, spinoffs are great opportunities for investors to snag up underfollowed, and sometimes undervalued, companies while the rest of the market turns a blind eye. For two upcoming publishing spinoffs, though, it’s going to be a hard sell even for special-situations lovers. The publishing business is in upheaval, and these two companies are a large part of what is being upheaved — and it’s probably why their parents are using this bull market as an excuse to unload these revenue drains.

Of course, since analysts and investors have been quick to squawk about these seemingly terrible investments, I’m compelled to take another look. There are few elements to stocks more attractive than being universally disliked by the Street and its minions. Let’s see if these two upcoming publishing spinoffs are as bad as they say.

News Corp (NASDAQ:NWS)Introducing the losers
Companies spin off their components in efforts to unlock hidden value in the parent, the subsidiary, or sometimes both. When a thriving business is burdened under a slower-moving conglomerate, sometimes the only way is for it to take on a life of its own as another public entity. In this case, though, it’s really the parents that are thriving and need to be allowed to fly free.

News Corp (NASDAQ:NWS) is a parental case in point. It’s a diversified media company with properties ranging from Fox News to The Wall Street Journal. It’s been a strong company that’s weathered disruptive technology and industry change well, phone hacking aside. The stock has responded accordingly, rising more than 50% in the past 12 months. The company is currently a top favorite among hedge fund managers, as its upcoming schism will yield one company that operates the difficult publishing business, and one that operates the media and entertainment operations — including the highly valuable regional sports networks.

The other company to announce excommunication of its publishing side is Time Warner Inc (NYSE:TWX). This is third major spinoff for Time Warner Inc (NYSE:TWX), which already separated its cable company, Time Warner Cable Inc (NYSE:TWC), and its Internet property, AOL Inc. (NYSE:AOL) . Though volatile at times, Time Warner Cable performed well in 2012, rising a bit more than 50% throughout the year, only to retract a bit in the early months of 2013. After a decade-long rough patch following the tech bust of the early 2000s, AOL seemed to have finally turned the corner midway through 2011 and has since been on a nearly vertical trend.

For both companies, though, these latest spinoffs haven’t been met with enthusiasm. Just this week, Yahoo! Inc‘s (NASDAQ:YHOO) Jeff Macke ripped into both prospective companies, citing Time Inc.’s troubled titles such as People magazine. The magazine industry, with the exception of those that have taken to the Web successfully, is getting crushed. A weekly newsrag, regardless of its content, cannot compete with the instant gratification of the Huffington Post or Gawker.

News Corp (NASDAQ:NWS)’s spinoff may be more attractive than Time Warner Inc (NYSE:TWX)’s, as the aforementioned Wall Street Journal remains the end-all publication for all things business. Even this tech-friendly blogger insists on reading it every morning, front to back. It is a ray of light in the midst of dying stars, such as The New York Post — another News Corp (NASDAQ:NWS) property.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!