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The ASX 200 share with ‘hidden value’: fund manager

The bigger ASX companies are well researched, so finding hidden value isn’t easy.
The post The ASX 200 share with ‘hidden value’: fund manager appeared first on The Motley Fool Australia. –

It’s not often you find hidden value in an S&P/ASX 200 Index (ASX: XJO) share.

Generally, you’re more likely to find undiscovered value in the smaller end of the market, which receives a lot less analyst research and coverage.

So, when we hear about an ASX 200 share that could have hidden value, we pay attention.

The ASX 200 share with hidden value

The ASX 200 share in question is News Corp (ASX: NWS), among Australia’s largest media organisations.

Among its other ventures, News Corp is a majority shareholder in global online real estate advertising company REA Group Limited (ASX: REA), which operates realestate.com.au.

Commenting on potential tailwinds for the News Corp share price on Livewire, head of investment strategy at Wilsons David Cassidy said, “we still think there is hidden value” in the ASX 200 share.

“We’ve always had a view there that you’re getting an REA for quite a cheap price,” he said. “We think it’s even more the case now, given the weakness in News Corp over the last week or so.”

According to Cassidy:

We think at current levels, let’s call it $24, $25, News Corp is undervalued, particularly because of that REA piece, which has been under pressure, but we do think either you’re getting REA cheaply or you’re getting the rest of News Corp and there are some good assets outside of REA for quite a cheap price at the moment.

So that’s another sort of hidden value situation, if we’ve got an REA demerger. I’m not sure if we’re going to get it, but if we did, that’ll be a potential catalyst to release that value out of News Corp.

News Corp share price snapshot

The News Corp share price has come under selling pressure this year, with the ASX 200 share down 23.5% since the opening bell on 4 January. By comparison, the ASX 200 is down 5.5% year-to-date.

News Corp shares pay a 1.1% trailing dividend yield, unfranked.

The post The ASX 200 share with ‘hidden value’: fund manager appeared first on The Motley Fool Australia.

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More reading

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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