POSTED BY ANGUS GEDDES
Getting a boost yesterday was Fairfax Media, which rose 2.4% yesterday to 2.4%. This was interesting given that there wasn’t a lot of news flow, of a positive nature at least. Indeed, the New South Wales Supreme Court ruled against the company in a defamation with Chris Gayle. The jury found that the publisher failed to prove reports alleging the West Indian star cricketer had committed an act of indecent exposure. No smoke without fire perhaps, but journalistic license can only be taken so far.
More interesting though was that Fairfax CEO Greg Hywood has been slowly topping up his shareholdings. It is generally encouraging to see senior executives getting more ‘skin in the game’, and I think it is also a case of him knowing what is already ‘out there,’ but not yet fully appreciated by the market.
The partial demerger of Domain and recalibration to a more appropriate multiple is going to be a key value driver for Fairfax. Furthermore, the print assets are continuing to turn around. A vigorous cost out program is certainly helping the bottom line, and there is more to come here. There are reports that all the publisher’s daily newspapers will be moving to tabloid size from the middle of next year. Easier to read of course, and also meaningful savings on print costs.
Disclosure: The Fat Prophets Global Contrarian Fund declares a holding in Fairfax.