FXJ is an Australian multi-platform media group with a broad range of activities including publishing of news, information and entertainment, advertising sales in newspaper, magazine and online formats, and radio broadcasting. FXJ conducts its core activities throughout Australia and New Zealand.
This company was trading at $4.80 back at the top of 2007 and is now at $0.58.
Sure the GFC can be part to blame with media spending down as companies cut costs but there seems to be more than just market forces at work here.
Print media is giving way to online media access; the problem is getting people to pay for it.
FXJ has seen its sales revenue decline constantly since 2009 and expect that this trend will continue.
They are looking to bring on a low cost online service to try and win back lost customers.
The problem is that there is so much free access news out there that people can choose not to pay and still stay up with the latest information. Let’s face it, it does not really matter which channel you are on these days the news is exactly the same. You can blame syndication for this.
The real interest in FXJ is the bid by Gina Rinehart looking to get a seat on the board. Here is a very successful women who could indeed be what this company needs to turn it around, the current board certainly has not provided much confidence to date.
We have a fair value for this company of $0.45, as such we do not recommend the company and consider it high risk.
If you are a speculative investor you may want to take the chance, if Gina gets on the board and turns this around it could pay off nicely.
For more information on Fairfax Media Limited (FXJ) please contact us on 07 4771 4577.