Barron’s Dimitra Defotis had an interview with Donald Yacktman recently and the write-up, entitled Loaded For Long-Term Value can be found in this barrons.com.
The long time value investor considers the market level “incidental” to his investing process. He sees investing bore down to two decisions: what business to buy and at what price. Currently he considers the high quality blue-chip – above average businesses selling at below average prices. He says “I have to go back a minimum of 18 years to find blue-chip or high-quality companies selling at these kind of prices relative to other things out there.
Yacktman talked a number of his holdings in the interview. Here is what he said about News Corp:
Read the full text of the interview here.
GuruFocus is currently gathering questions to have a Q&A with Donald Yacktman and his son Steven Yacktman. You can submit your question here.
The long time value investor considers the market level “incidental” to his investing process. He sees investing bore down to two decisions: what business to buy and at what price. Currently he considers the high quality blue-chip – above average businesses selling at below average prices. He says “I have to go back a minimum of 18 years to find blue-chip or high-quality companies selling at these kind of prices relative to other things out there.
Yacktman talked a number of his holdings in the interview. Here is what he said about News Corp:
What's the cheapest thing you own now?
At the end of 2010, News Corp. [NWSA] was it. In our minds, that was the best risk-adjusted value in the marketplace.
What do you think of News Corp.'s acquisition strategy?
It is pretty clear that the company is moving more toward a cable or satellite-type model. The Fox News audience now is bigger than MSNBC and CNN combined. So what Rupert Murdoch did is, he found a niche and has used it. He paid a whale of a lot of money for Dow Jones [parent of Barron's]. But the tie-in with CNBC, when that contract is up [in late 2012], I would not be surprised to see enormous build-out of Fox Business News as a result of tying in more with The Wall Street Journal and Barron's.
I think Rupert Murdoch is very visionary, and I think Chief Operating Officer Chase Carey, from DirectTV, is a good addition to management. I think Murdoch is a little bit of a kingdom builder, and he has paid some pretty good prices for things at times. But I think he also sees things very well, long term, and [has been] able to put the components together. The business model is moving more and more toward evergreen income, like a Coke or a Pepsi, because the fees that News Corp gets from cable are very consistent and are becoming a bigger part of the total.
Do you worry News Corp. will pay too much for the remaining stake in BSkyB?
That is a legitimate fear, and I wouldn't mind if News Corp. bought a lot of shares back, rather than overpay for BSkyB [British Sky Broadcasting Group, BSY.U.K.]. But if they do it halfway decently, it will still enhance value.
Read the full text of the interview here.
GuruFocus is currently gathering questions to have a Q&A with Donald Yacktman and his son Steven Yacktman. You can submit your question here.
