Investors still love (or tolerate) Rupert Murdoch

You wouldn't know that there was a big scandal facing Rupert Murdoch's News Corp. by looking at its stock price. Investors are brushing off the hacking incident and focusing on earnings.

NEW YORK (CNNMoney) -- Rupert Murdoch is a hero to the right and a demon to the left. But Wall Street doesn't care about red state/blue state distinctions.

News Corp. shareholders, despite the lingering newspaper phone-hacking scandal in the United Kingdom, continue to look at the company's chairman and CEO and only see green.

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Even though Murdoch admitted Thursday at a media ethics inquiry in London that there was a "cover-up" of numerous hacking incidents at the now defunct News of the World tabloid, shares of News Corp. fell just slightly. News Corp. (NWSA, Fortune 500) actually rose on Wednesday as Murdoch was making his first appearance before the British government-backed judicial panel.

In fact, News Corp.'s stock is up 8% so far this year and nearly 30% since Murdoch and his son James both appeared in front of Parliament last July to address the hacking issue.

This is in stark contrast to how investors have reacted to other corporate scandals as of late. Wal-Mart (WMT, Fortune 500) plunged nearly 5% Monday and another 3% Tuesday following a New York Times report over the weekend alleging bribery by executives at the retailer's Mexican unit.

And shares of natural gas company Chesapeake Energy (CHK, Fortune 500) have fallen about 5% since Reuters first reported last week that the company's CEO used stakes in Chesapeake's wells to take out more than $1 billion in personal loans.

Why are investors still shrugging off the tabloid soap opera while the mainstream media continues to focus on it? There are several reasons.

No smoking gun. For one, Rupert Murdoch keeps professing his innocence. He has said on numerous occasions that he and News Corp. have been the victims of rogue employees. He's also apologized several times for the wrongdoing at the paper. And in case you forgot, he shut the News of the World down.

Now competitors in rival newsrooms may snicker at all this. There are a lot of legitimate questions about how remorseful Murdoch, who is no stranger to controversy, really is.

There are also probably a lot of doubts among journalists that Murdoch really could have been ignorant of what was going on at his British newspapers. After all, this is a guy who still loves the publishing business. It's in his blood.

But none of that matters to investors because there still are no real smoking guns that would indicate that Rupert or James themselves did anything illegal. Barring that, there is no legitimate reason for investors to worry about a Murdoch winding up in court.

Without absolute proof that Rupert did something that would jeopardize any of his company's many broadcast licenses around the globe, this is just a distraction for investors. In a strange way, it might even be helping to boost the stock.

Thanks for the cash, Rupe! Since the hacking scandal unfolded last year, News Corp. has boosted its dividend and increased the amount of its share buyback program.

David Bank, an analyst with RBC Capital Markets in New York, argues that these actions are directly a result of the hacking scandal. It is an attempt to keep investors happy at a time when there is a lot of bad press.

"The more pressure that Rupert Murdoch is under, the more likely it is that he will manage the use of cash in a shareholder-friendly way," Bank said.

The problems in the U.K. are also being dismissed because newspaper publishing -- which includes The Wall Street Journal and other Dow Jones properties as well as The New York Post -- is now one of the least important parts of the News Corp. empire.

The papers are lumped in with News Corp.'s publishing division. That unit also houses the HarperCollins book publisher. Revenue and operating profits for News Corp.'s publishing division fell in the company's most recent quarter.

I wrote a column last July in which I suggested that News Corp. should sell its newspapers in order to rid itself of a business that now yields little in the way of financial rewards and a lot in the way of public relations headaches. That probably won't happen as long as Murdoch is calling the shots .. which brings me to my next point.

Next CEO likely won't have Murdoch surname. Murdoch is 81. Not to be macabre, but is it unimaginable that a point will come in the not-so-distant future where he may decide to retire ... or be forced to step down for medical reasons?

If that happens, investors seem to be betting that the next CEO will not be son and deputy chief operating officer James, but James' boss: current News Corp. COO Chase Carey.

"If something happened to Rupert Murdoch tomorrow where he couldn't carry on duties as chairman and CEO, his successor would very likely be Chase Carey and that would be viewed positively," Bank said.

Carey was previously the CEO of satellite broadcaster DirecTV (DTV, Fortune 500). Before that, he worked for Fox for 15 years. His roots are in broadcast media, not newspapers. He might be the type of person who would be more willing to sell off publishing assets.

Sales and earnings were up at News Corp.'s broadcast television, cable television and movie studio units in the most recent quarter. And those three divisions account for nearly two-thirds of News Corp.'s sales and virtually all of the company's profits.

Heck, as heretic as it may be to the Murdoch family, a Carey-led News Corp. would probably be wise to just simply rename the company Fox to reflect where all the real profits and growth opportunities are anyway.

Value and growth are "fair and balanced." Finally, the stock seems reasonably valued too. At 14 times fiscal 2012 earnings estimates, it is trading at a bit of a premium to Viacom (VIAB, Fortune 500) and CNNMoney parent company Time Warner (TWX, Fortune 500). News Corp. has outperformed both of those stocks this year.

What's more, shares trade only slightly below the valuation of Walt Disney (DIS, Fortune 500) and CBS (CBS, Fortune 500), two media stocks that News Corp has lagged this year. But it makes sense that News Corp. would be trading roughly in line with its top peers. Media profits overall are expected to be fairly decent this year.

If you look beyond the bad headlines about phone hacking -- which investors clearly are -- you discover that News Corp. is a pretty healthy media company. Earnings are expected to grow 16% this fiscal year and 23% in fiscal 2013.

The days of a Murdoch discount seem to be gone too. After a flurry of pricey deals a few years ago -- Dow Jones and the since-disposed-of MySpace being the most prominent -- News Corp. has slowed down its acquisitive ways.

So if anything is going to bring down Murdoch and News Corp's stock price, it's not likely to be more bad news about British tabloids. Investors are rightfully focused more on television ratings and box office numbers.

Best of StockTwits: Bit of a dull day today after Apple (AAPL, Fortune 500) euphoria Wednesday. But one comment about casino operator Las Vegas Sands (LVS, Fortune 500), which is down despite pretty good earnings, caught my eye.

Dasan: Adelson comparing his company performance to $AAPL. He's right, actually. $LVS

CEO Sheldon Adelson makes an interesting point. But it depends on the time frame. Shares of Las Vegas Sands and Apple have doubled over the past two years. However, Apple has been a much better stock over the past decade. And I keep waiting for Apple to get into gambling. iSlots anyone?

The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, and Abbott Laboratories, La Monica does not own positions in any individual stocks.