Any stock with exposure to the UK has been smashed following the ‘Brexit’ vote last week. While News Corporation has exposure to the UK through its newspaper business (it owns The Sun, The Times and The Sunday Times), as well as its book publishing business HarperCollins, it’s difficult to see how there might be any significant long-term negative implications for News’s business.
Nevertheless, the stock has fallen more than 2% today and is down 10% since Will News Corp buy all of Foxtel?. The case for buying News Corporation should be clear from past reviews – we maintain that there is significant value in the company, which we’ll update in another review next week.
Nevertheless, it is important to take advantage of ‘down’ days. We don’t necessarily advise waiting until next week’s review (although we make no comment on what the share price will do between now and then).
We’re lifting our maximum portfolio weighting from 4% to 5%, reflecting the fact that more of the company's value can be attributed to relatively stable assets. Assuming you don’t have any ethical issues with investing in this company – and are aware of the risks (note our risk ratings of 'High') – we consider News Corporation a compelling BUY.