We purchased shares of Twenty-First Century Fox, Inc., (FOXA) a global media content company that monetizes a variety of sports and general entertainment content via a number of different global channels including broadcast TV, cable TV and movies. Fox split from News Corp in 2013 making it a pure play TV and movie content company which we believe deserves a premium valuation due to its future growth prospects. Fox is well positioned to expand its sports and general entertainment content in the U.S. and in international markets which should lead to higher revenue growth and an increase in operating margins going forward. We also believe Fox’s management will be prudent with its capital allocation strategy and will use its free cash flow to repurchase shares and invest in secular growth opportunities.
From Diamond Hill Capital (Trades, Portfolio)'s Select Fund Second Quarter 2014 Commentary.
