Citigroup media analyst Jason Bazinet told CNBC he made News Corp his top pick on news that the company withdrew its bidfor BSkyB amid the phone hacking scandal, calling the drop in share price a "great opportunity."
"I know there is a lot of uncertainty and there is certainly headline risk, but I think the odds of this materially impacting News Corp is close to negligent," Bazinet said.
Bazinet said he believes it didn't matter whether News Corp's bid for BSkyB went forward or not. "Under either scenario the stock was attractive," he said.
Bazinet said that, from a financial standpoint, it doesn't make sense for shares of both BSkyB and News Corp to trade at their current levels. "At the end of the day this is a zero-sum game, and we think it presents a great opportunity to pick up News Corp at these levels," he said.
"The level of profits that comes out of (BSkyB's assets) is negligible in the context of the broader News Corp," Bazinet said. "We know that from public filings in the UK. So if there is a disposition in those assets, it doesn't really matter," he said.
He noted, however, that his outlook assumes the hacking accusations are isolated to the UK.
On Tuesday, Jay Rockefeller, a prominent U.S. senator, called for a probe into whether News Corp's newspapers had broken any U.S. laws following reports that victims of the Sept. 11 terrorist attacks may have had their phones hacked by detectives working for the News of the World.
"There has been some discussion among investors that the FCC might pull licenses here in the U.S., but the last time that happened was in 1987 and it took 20 years to play out."
In April, shares of News Corp sank after Bernstein Research and UBS cut their price targets on concerns over the long-term growth of the company's Internet division, Reuters reported.
UBS trimmed its price target on News Corp to $25 from $26, citing "uncertainty" about the outlook for News Corp's Fox Interactive Media and Sky Italia satellite pay-TV service, according to Reuters. It maintained its "buy" rating on the stock.
Bernstein Research cut its rating to "market perform" from "outperform," and lowered its price target to $21 per share from $24, Reuters reported.
"As one of our key long-term profit drivers, FIM/MySpace's ability to meet near-term consensus estimates, despite increased usage, worries us about the accuracy of long-term forecasts," Bernstein Research analyst Michael Nathanson said in a research note.
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Jason Bazinet does not own shares of News Corp.
Citigroup Global Markets has/had within the past 12 months provided company non-investment-banking, securities-related and non-securities related services and received compensation for it.
Citigroup Global Markets is a market maker in the publicly traded equity securities of News Corp.