Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Tribune Media Company stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Tribune Media has a trailing twelve months PE ratio of 12.31, as you can see in the chart below:
This level actually compares favorably with the market at large, as the PE for the S&P 500 stands at about 18.41. Also, if we focus on the long-term PE trend, Tribune Media’s current PE level puts it way below its midpoint of 22.96 over the past five years.
The stock’s PE compares quite favorably with the Consumer Discretionary Market’s trailing twelve months PE ratio, which stands at 22.07. This indicates that the stock is undervalued right now, compared to its peers.
Meanwhile, Tribune Media has a forward PE ratio (price relative to this year’s earnings) of 19.50, which is much higher than the current level. So, it is fair to expect an increase in the share price in the near term.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Tribune Media has a P/S ratio of 2.05. This is lower than the S&P 500 average, which comes in at 3.33x right now. Also, as we can see in the chart below, this is way below the highs for this stock in particular over the past few years.
Broad Value Outlook
In aggregate, Tribune Media currently has a Value Score of B, putting it into the top 40% of all stocks we cover from this look. This makes Tribune Media a solid choice for value investors.
What About the Stock Overall?
Though Tribune Media might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth Score of B and a Momentum Score of A. This gives TRCO a Zacks VGM score — or its overarching fundamental grade — of B. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been encouraging. The current year has seen one estimate go higher in the past sixty days compared to no downward revisions, while the next-year estimate has seen one up and zero down in the same time period.
This has had a positive effect on the consensus estimate. While the current-year consensus estimate shot up 7.2% over the past two months, the next-year estimate has also increased 1.4%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Such bullish analyst sentiments is the reason why the stock has a Zacks Rank #1 (Strong Buy) and why we are looking for outperformance from the company in the near term.
Bottom Line
Tribune Media is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Despite a sluggish industry rank (among Bottom 33% of more than 250 industries), a Zacks Rank #1, instils investors’ optimism in the stock.
Also, over the past two years, the broader industry has clearly outperformed the market at large, as you can see below:
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We believe, despite a sluggish industry rank, a good Zacks rank and bearish analyst sentiments signal that the stock is likely to benefit from favorable broader factors in the immediate future. Add to this robust value metrics, and we believe that we have a strong value contender in TRCO.
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Is Tribune Media (TRCO) a Worthy Pick for Value Investors?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Tribune Media Company stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Tribune Media has a trailing twelve months PE ratio of 12.31, as you can see in the chart below:
This level actually compares favorably with the market at large, as the PE for the S&P 500 stands at about 18.41. Also, if we focus on the long-term PE trend, Tribune Media’s current PE level puts it way below its midpoint of 22.96 over the past five years.
The stock’s PE compares quite favorably with the Consumer Discretionary Market’s trailing twelve months PE ratio, which stands at 22.07. This indicates that the stock is undervalued right now, compared to its peers.
Meanwhile, Tribune Media has a forward PE ratio (price relative to this year’s earnings) of 19.50, which is much higher than the current level. So, it is fair to expect an increase in the share price in the near term.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Tribune Media has a P/S ratio of 2.05. This is lower than the S&P 500 average, which comes in at 3.33x right now. Also, as we can see in the chart below, this is way below the highs for this stock in particular over the past few years.
Broad Value Outlook
In aggregate, Tribune Media currently has a Value Score of B, putting it into the top 40% of all stocks we cover from this look. This makes Tribune Media a solid choice for value investors.
What About the Stock Overall?
Though Tribune Media might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth Score of B and a Momentum Score of A. This gives TRCO a Zacks VGM score — or its overarching fundamental grade — of B. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been encouraging. The current year has seen one estimate go higher in the past sixty days compared to no downward revisions, while the next-year estimate has seen one up and zero down in the same time period.
This has had a positive effect on the consensus estimate. While the current-year consensus estimate shot up 7.2% over the past two months, the next-year estimate has also increased 1.4%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Tribune Media Company Price and Consensus
Tribune Media Company price-consensus-chart | Tribune Media Company Quote
Such bullish analyst sentiments is the reason why the stock has a Zacks Rank #1 (Strong Buy) and why we are looking for outperformance from the company in the near term.
Bottom Line
Tribune Media is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Despite a sluggish industry rank (among Bottom 33% of more than 250 industries), a Zacks Rank #1, instils investors’ optimism in the stock.
Also, over the past two years, the broader industry has clearly outperformed the market at large, as you can see below:
We believe, despite a sluggish industry rank, a good Zacks rank and bearish analyst sentiments signal that the stock is likely to benefit from favorable broader factors in the immediate future. Add to this robust value metrics, and we believe that we have a strong value contender in TRCO.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>