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Graham Griffin
Graham Griffin
Articles (195) 

Dodge & Cox Boosts Stake in Fox

Media holding sees first big addition of the year

Dodge & Cox (Trades, Portfolio) has revealed an addition to its holding in Fox Corp. (NASDAQ:FOXA) according to GuruFocus' Real-Time Picks, a Premium feature.

Dodge & Cox was founded in 1930 by Van Duyn Dodge and E. Morris Cox. The firm employs a team research approach in making investment decisions.The Dodge & Cox team is guided both in what its buys and what it sells by an ongoing search for superior relative value, steering clear of popular choices that come at a price it would rather not pay.

On Nov. 30, the firm made a 32.52% increase in its Fox holding with the purchase of 10.49 million shares. During the day of the transaction, the shares traded at an average price of $28.84. Overall, the purchase had an impact of 0.28% on the portfolio and GuruFocus estimates the firm has lost 14.68% on the holding since it was first purchased in 2019.

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Fox represents the assets not sold to Disney (DIS) by the predecessor firm, Twenty First Century Fox. The remaining assets include Fox News, the FOX broadcast network, FS1 and FS2, Fox Business, Big Ten Network, 28 owned and operated local television stations, of which 17 are affiliated with the Fox Network, and the Fox Studios lot. The Murdoch family continues to control the successor firm, which represents a large-scale bet on the value of live sports and news in the U.S. market.

On Dec. 11, the stock was trading at $29.08 per share with a market cap of $17.18 billion. According to the Peter Lynch chart, the stock has been trading below intrinsic value since August of this year.

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GuruFocus gives the company a financial strength rating of 5 out of 10 and a profitability rank of 5 out of 10. There are currently no severe warning signs issued for the company. The company's cash-to-debt ratio of 0.6 ranks it lower than 58.89% of the industry, yet is slightly above the median over the last decade. Despite decreasing net income, the company has maintained adequate free cash flow to support dividend payouts.

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Dodge & Cox is currently the top shareholder with 7.18% of shares outstanding. Other top shareholders include BlackRock Inc. (Trades, Portfolio), Vanguard Group Inc. (Trades, Portfolio), Seth Klarman (Trades, Portfolio) and Independent Franchise Partners LP (Trades, Portfolio).

Portfolio overview

At the end of the third quarter, the firm's portfolio contained 184 stocks, with three new holdings in Credicorp Ltd. (NYSE:BAP), Stryker Corp. (NYSE:SYK) and TC Energy Corp (NYSE:TRP). It was valued at $109.28 billion and has seen a turnover rate of 4%. Top holdings are FedEx Corp. (NYSE:FDX), Comcast Corp. (NASDAQ:CMCSA), Alphabet Inc. (NASDAQ:GOOG), Capital One Financial Corp. (NYSE:COF) and Johnson Controls International PLC (NYSE:JCI).

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By weight, the top three sectors represented are financial services (24.96%), technology (18.57%) and health care (15.24%).

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Disclosure: Author owns no stocks mentioned.

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