Point72 Asset Management has made a big bet on Fox Corp.
Steve Cohen’s multistrategy hedge fund firm said in an initial 13G filing, made public Tuesday evening, that it owns more than 12 million shares of the media giant, or 5 percent of the total outstanding. This includes 2.37 million shares issuable upon the exercise of options. The filing of a form 13G indicates the investment is passive.
The stake is valued at close to $370 million based on Tuesday’s closing price of $30.58, which was up 1.19 percent on the day. However, the stock is trading near the bottom of a narrow 52-week trading range. It is down about 30 percent from its all-time high, hit in February 2022.
Point72, a multistrategy firm whose largest strategy is long-short equity, declined to comment.
Fox specializes in news, sports, and entertainment programming through well-known brands Fox News Network, Fox Sports, Fox Entertainment, Fox Television Stations, and Tubi Media Group. It became a separate company in 2019 when the Walt Disney Co. acquired 21st Century Fox. The company appears to be an intriguing value play for investors.
A group of 16 analysts estimates Fox will earn $3.22 per share this year and $3.80 in 2025. This puts the stock’s price-to-earnings multiple at about 8 times next year’s estimate. The average price target is $34.27.
UBS, which has a Buy rating, has a $44 price target. In its most recent analyst report, sent to clients in early February after the company reported fiscal second-quarter results, UBS stresses that though revenues were in line with expectations, EBITDA was ahead of forecasts, “driven by better profits across segments.” Fox ended the quarter with $4.1 billion in cash, which works out to more than $8 per share.
Meanwhile, Fox, Warner Brothers Entertainment, and ESPN are planning to launch a new streaming service this fall that will combine their sports channels.