In today’s daily we have covered stock research on NEWS CORP (Expensive). To view list of dividends click here

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S&P 500 was up 2.50 points or 0.13% on Thursday and closed at 1956.98. The S&P 500 ended at another record high on Thursday, extending gains for a fifth day on optimism that the Federal Reserve will keep interest rates low. BlackBerry Ltd. jumped 9.7 percent after reporting a narrower loss than analysts had projected. Kroger Co. advanced 5.1 percent as it increased its full-year profit forecast. Coach Inc. slumped 8.9 percent after the largest U.S. luxury handbag maker forecast a prolonged slump in sales at its North American stores.

Gold benefitted most from the U.S central bank’s commitment to maintain low interest rates. The metal was up $39 or 3.1% to $1319 its biggest gain in eight months. The U.S dollar was weak across the board with its value falling 0.3% compared with the basket of currencies. Brent crude settled at 9 month high of $115.06 up 80 cents after touching a high of $115.71.


S&P 500 Daily Chart (Source – Thomson Reuters)
 
S&P ASX 200was up by 85.5 points or 1.59% on Thursday and closed at 5468.2 points. Dulux group has advised that it has completed a private placement of notes in the U.S resulting in a funding of approximately A$200 million. Perpetual Limited has become a substantial holder in EBET Limited with a voting power of 5.08%. EBET Limited is an operator of gaming machines and gaming management systems.

David Jones has advised that it is postponing the scheme meeting with regards to the Woolworths proposal until 14^th July. Santos and GDF Suez announced that it will be considering other options besides the floating LNG option for the  Petrel, Tern and Frigate gas fields located 250KM offshore west of Darwin.


ASX 200 Daily Chart (Source – Thomson Reuters)

The top gainers on ASX 200 were:- 



Stock of the Day – News Corp (NWS)
 
News Corp reported a 4% increase in Earnings before interest, tax, depreciation and amortization or EBITDA to U.S $175 million. The performance was helped by a stronger than expected contribution from the book publishing division reflecting the popularity of the Divergent book series. REA group also contributed strongly with revenue up 14% and EBITDA up 29%.
  

Diversified business Geographically(Source – Company Reports)

Both divisions helped offset revenue declines from the newspaper division which reported a revenue decline of 9%. New Corp. has U.S 3.2 billion dollars in cash and continues its pursuit to evolve from a newspaper publishing business to a global digital media platform. We see merit in the strategy. Newspapers publishing remains challenging as advertisers follow audiences online.


Diversified Business Components (Source – Company Reports)

The commoditization of news and fragmentation of audiences will make it difficult for the company to achieve returns above its cost of capital, while the revenue from its core business remains on a downward trend. We believe there is high investment uncertainty due to company’s operating leverage reliant on the cyclicality of the media’s revenues and constrained by predominantly high fixed operating costs.
 

NWS Daily Chart (Source – Thomson Reuters)

Revenue weakness form the news and information division, down 9% was driven by 21% decline in Australian newspaper revenue. Currency accounts for 13% of this decline. The fall in revenue is more marked than we had expected. Circulation volume declines have been partially offset by cover price increases and we expect further increases to stabilize the economic returns of print. We believe the stock is expensive at its current price and would review the stock at a later date.

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