Portfolio Manager Stephen Yacktman of Yacktman Asset Management has continued to hold Twenty-First Century Fox Inc. (FOX) after its split from News Corp., because its cable media side has been able to take market share and create value for advertisers.
“The piece of the business that really attracted us to Fox was the cable media side, which was a much smaller business when we started buying the stock. Cable advertising had historically been underpriced…and so Fox has been able to raise rates and continue to take market share. It’s just a really good business,” Yacktman said.
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Fox has been able to take market share on the cable news side because most broadcasters have a liberal bent, Yacktmans says. With Fox News having a conservative bias, it has little competition.
“The genius in Fox is there is no major competitor on the conservative side, so they have that area of the marketplace locked up, which results in high market share and a valuable channel for advertising. If companies want to reach that demographic, Fox is a good way to do it. And so it creates a good value for advertisers,” Yacktman said.
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