Fox’s statement is firm and clear. An Australian Financial Review report that Rupert Murdoch’s company has had “preliminary discussions” about combining with Discovery Communications is “categorically untrue,” the entertainment giant says. A Discovery exec tells me much the same thing: It’s “not true.”

But Wall Street seems to be looking differently at Discovery following the story, plus a comment by respected money manager Mario Gabelli on Friday that its share price could triple in three years. The cable programmer’s stock is up about 5% in afternoon trading.

The uptick may reflect a view that the company has been punished enough in a six-month period where its stock has fallen 25.3%.  Investors grew concerned as ratings and ad sales weakened. Discovery also ticked off Comcast by challenging its plan to merge with Time Warner Cable. The programmer’s carriage deal with the cable giant expires in June.

And even if Discovery and Fox haven’t talked, there’s no reason why they couldn’t. Indeed, “they ought to have a chat,” Bernstein Research’s Todd Juenger says today. A merger “would make strategic sense on a number of levels.” Both companies derive most of their profits from cable programming and see growth opportunities overseas. Fox’s Nat Geo and Sky Sports would pair nicely with Discovery’s namesake channel and its recently acquired Eurosport.

What’s more, Murdoch and Discovery’s top shareholder — Liberty Media’s John Malone — appear eager to make deals. The Fox CEO tried to buy Time Warner last year, before being rebuffed by its CEO Jeff Bewkes. Malone also suffered a setback of sorts when the cable operator he backs, Charter, was outbid by Comcast in the competition to buy Time Warner Cable.

Murdoch and Malone are long-time frenemies. They’ve tangled in Europe, where Malone’s Liberty Global is the largest cable operator and Murdoch is the largest satellite provider. A decade ago Malone quietly picked up 19% of Murdoch’s company, making him the No. 2 shareholder. Murdoch resolved that by swapping the shares he owned in DirecTV for Malone’s holdings in his company.