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Viacom (VIAB) Hits a 52-Week Low Due to Multiple Headwinds
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Shares of Viacom Inc. hit a 52-week low of $25.37 per share during the trading session on Oct 9, before retracing a bit to close at $25.42. The stock has underperformed its industry in a year. It declined 28.9% in contrast to the industry’s 6.4% gain.
Reasons for the Downgrade
The company continues to face declining domestic advertising revenues. Also, the bleak outlook with respect to domestic affiliate revenues for the fiscal fourth quarter remains a concern. The company expects the metric to fall in low-single digits in the fiscal fourth quarter.
Viacom’s high debt level is also a concern. The company exited the fiscal third quarter with a high debt-to-capitalization ratio of more than 66%. In fact, its long-term debt-to-equity (expressed as a percentage) ratio is currently well over 100. This compares unfavorably with the industry’s tally of 57.4% and also the S&P 500 index’s reading of 84%.
The company is also liable to be hurt by adverse foreign currency movement as it operates globally. Plus, cable distributorsmay intend to cut costs due to stiff competition in the cable television industry which in turn might affect media stocks like Viacom.
Shares of American Woodmark, Anta Sports Products and Caleres have rallied 16.2%, 65.6% and 12.2%, respectively, in a year.
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It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Viacom (VIAB) Hits a 52-Week Low Due to Multiple Headwinds
Shares of Viacom Inc. hit a 52-week low of $25.37 per share during the trading session on Oct 9, before retracing a bit to close at $25.42. The stock has underperformed its industry in a year. It declined 28.9% in contrast to the industry’s 6.4% gain.
Reasons for the Downgrade
The company continues to face declining domestic advertising revenues. Also, the bleak outlook with respect to domestic affiliate revenues for the fiscal fourth quarter remains a concern. The company expects the metric to fall in low-single digits in the fiscal fourth quarter.
Viacom’s high debt level is also a concern. The company exited the fiscal third quarter with a high debt-to-capitalization ratio of more than 66%. In fact, its long-term debt-to-equity (expressed as a percentage) ratio is currently well over 100. This compares unfavorably with the industry’s tally of 57.4% and also the S&P 500 index’s reading of 84%.
The company is also liable to be hurt by adverse foreign currency movement as it operates globally. Plus, cable distributorsmay intend to cut costs due to stiff competition in the cable television industry which in turn might affect media stocks like Viacom.
Zacks Rank & Key Picks
Viacom currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader Consumer Discretionary sector are American Woodmark Corporation (AMWD - Free Report) , Anta Sports Products Ltd. (ANPDF - Free Report) and Caleres, Inc. (CAL - Free Report) , each sporting a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of American Woodmark, Anta Sports Products and Caleres have rallied 16.2%, 65.6% and 12.2%, respectively, in a year.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>