NWSA - Valens Credit Report - 2022 10 11
Credit markets are materially overstating credit risk, with a cash bond YTW of 6.779% relative to an Intrinsic YTW of 5.019% and an Intrinsic CDS of 118bps. Furthermore, Moody's is overstating NWSA's fundamental credit risk with its Ba1 credit rating three notches below Valens' IG4+ (Baa1) credit rating.Incentives Dictate Behavior™ analysis highlights positive signals for credit holders. NWSA's compensation metrics should generally drive management to focus on all three value drivers: margins, turns, and growth, which should lead to Uniform ROA expansion and increased cash flows available for obligations. Moreover, while most management members are not material owners of NWSA equity relative to their average annual compensation, Executive Chairman Murdoch's high equity ownership indicates he should be able to influence management to be well-aligned with shareholders for long-term value creation.
Earnings Call Forensics™ of NWSA's Q4 2022 (08/09/2022) call highlights that management is confident Dow Jones, Digital Real Estate Services, and Book Publishing were able to surpass their annual performance benchmarks.
News is a media and information services company. The company comprises businesses across a range of media, including news and information services, subscription video services in Australia, book publishing and digital real estate services, that are distributed under brands, including The Wall Street Journal, Dow Jones, The Australian, Herald Sun, The Sun, The Times, HarperCollins Publishers, Foxtel, FOX SPORTS Australia, realestate.com.au, realtor.com?, talkSPORT and others. The company distributes its content to consumers across platforms consisting of print and television, as well as digital platforms including websites, applications for mobile devices and tablets, social media and e-book devices.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.