Insider Jeff Ubben Feeds Yacktman's Twenty-First Century Fox

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Jeff Ubben (Trades, Portfolio), CEO and chief investment officer of ValueAct Holding LP, has been a director of Twenty-First Century Fox Inc. Class B (NASDAQ:FOX) since November 2015. On Oct. 3, the guru purchased 3 million shares at $26.06 per share, according to the company’s Form 4 filing with the Securities and Exchange Commission. The insider transaction cost $78.18 million.

Lachlan Murdoch, co-chairman of Twenty-First Century Fox Inc., left, and James Murdoch, chief executive officer of Twenty-First Century Fox Inc., arrive for the Allen & Co. Media and Technology

Conference in Sun Valley, Idaho, U.S., on Tuesday, July 5, 2016. Billionaires, chief executive officers, and leaders from the technology, media, and finance industries gather this week at the Idaho mountain resort conference hosted by investment banking firm Allen & Co. Photographer: David Paul Morris/Bloomberg

Fox’s institutional and insider ownership is 22.31% and 0.04%, respectively. As of June 30, Ubben and Donald Yacktman (Trades, Portfolio) own 47,326,334 and 27,975,629 respective shares of the entertainment company. Yacktman, who has the third largest stake in Fox, also owns over 40 million shares of FOX Class A stock.

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Despite having a modest financial strength rank of 5, Fox has a profitability rank of 8, implying high growth potential. The company has a high Greenblatt return on capital, strong returns on equity, and its operating margin is near a 10-year high. Additionally, Fox’s price-to-book and price-to-salesratios are currently near a three-year low, and its return on invested capital outperforms its WACC.

While the company is slightly overvalued based on its Peter Lynch chart, Fox is undervalued based on its median P/S value and Peter Lynch value. The former valuation method assumes that the stock valuations revert to the historical mean P/S value while the latter assumes that the PEG equals one for fair-valued companies.

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Disclosure: The author has no position in the stocks mentioned in the article.

source - www.forbes.com

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