Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 3 stocks made the list for top value stocks in the Broadcasting industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Broadcasting Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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3 Undervalued Broadcasting Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 3 undervalued stocks in the Broadcasting industry for Monday, September 16, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Broadcasting industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Nexstar Media Group Inc’s Value Grade

Value Grade:

Nexstar Media Group, Inc. is a diversified media company with television broadcasting, television network and digital media assets operating in the United States. The Company produces and distributes engaging local and national news, sports and entertainment content across its television and digital platforms. The Company’s segments include Broadcast and The CW Network, LLC (The CW). The Broadcast segment includes television stations and related local websites that Company owns, operates, programs or provides sales and other services to in various markets across the United States, NewsNation, a national cable news network, two owned and operated digital multicast networks and other multicast network services, and WGN-AM, a Chicago radio station. The CW segment is a broadcast network in the United States. The other activities of the Company include digital businesses focused on the national marketplace and the management of certain real estate assets.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Nexstar Media Group Inc has a Value Score of 75, which is considered to be undervalued.

When you look at Nexstar Media Group Inc’s price-to-sales ratio at 1.10 compared to the industry median at 0.28, this company has a higher price relative to revenue compared to its peers. This could make Nexstar Media Group Inc’s stock less attractive for value investors.

Nexstar Media Group Inc’s price-earnings ratio is 13.12 compared to the industry median at 12.89. This means it has a higher share price relative to earnings compared to its peers. This could make Nexstar Media Group Inc less attractive for value investors.

Now, let’s assess Nexstar Media Group Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 7.1, when compared to the industry median of 7.6, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Nexstar Media Group Inc’s shareholder yield is higher than its industry median ratio of 0.00%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Nexstar Media Group Inc’s price-to-book ratio is higher than its industry median ratio of 0.61. This could make Nexstar Media Group Inc less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Nexstar Media Group Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Nexstar Media Group Inc’s price-to-free-cash-flow ratio is higher than its industry median ratio of 5.82. This could make Nexstar Media Group Inc less attractive because the higher P/FCF ratio indicates that Nexstar Media Group Inc is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

E W Scripps Co’s Value Grade

Value Grade:

The E.W. Scripps Company is a diverse media enterprise that serves audiences and businesses through a portfolio of more than 60 local television stations in more than 40 markets and national news and entertainment networks. Its Local Media segment includes more than 60 local television stations and their related digital operations. Its television station group includes approximately 25% of the nation’s television households and includes 18 ABC affiliates, 11 NBC affiliates, nine CBS affiliates and four FOX affiliates. It also has seven CW affiliates-four on full power stations and three on multicast; seven independent stations and 10 additional low power stations. Its Scripps Networks segment includes national news outlets Scripps News and Court TV, as well as entertainment brands ION, Bounce, Defy TV, Grit, ION Mystery and Laff. The networks reach nearly every United States television home through free over-the-air broadcast, cable/satellite, connected TV and digital distribution.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

E W Scripps Co has a Value Score of 93, which is considered to be undervalued.

E W Scripps Co’s price-to-book ratio is higher than its peers. This could make E W Scripps Co less attractive for value investors when compared to the industry median at 0.61.

You can read more about E W Scripps Co’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Grupo Televisa SAB (ADR)’s Value Grade

Value Grade:

Grupo Televisa, S.A.B. is a media company, cable operator in Mexico and an operator of a direct-to-home (DTH) satellite pay television system in Mexico. The Company operates through four segments: Content, Sky, Cable and Other Businesses. The Content segment includes Advertising, Network Subscription, and Licensing and Syndication. The Sky segment includes DTH broadcast satellite pay television services in Mexico, Central America and the Dominican Republic. The Cable segment includes the operation of a cable multiple system in the Mexico City metropolitan area; the operation of telecommunication, and the operation of a cable multiple system. The Other Businesses segment includes its domestic operations in sports and show business promotion, soccer, feature film production and distribution, gaming, radio, publishing and publishing distribution. The Company distributes the content it produces through various broadcast channels in Mexico and in approximately 50 other countries.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Grupo Televisa SAB (ADR) has a Value Score of 100, which is considered to be undervalued.

Grupo Televisa SAB (ADR)’s price-to-book ratio is higher than its peers. This could make Grupo Televisa SAB (ADR) less attractive for value investors when compared to the industry median at 0.61.

You can read more about Grupo Televisa SAB (ADR)’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Broadcasting Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Broadcasting stocks as well as other industrys.

Choosing Which of the 3 Best Broadcasting Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Nexstar Media Group Inc stock has a Value Grade of B.
• E W Scripps Co stock has a Value Grade of A.
• Grupo Televisa SAB (ADR) stock has a Value Grade of A.

Now that you have a bit more background about each of the 3 undervalued stocks in the Broadcasting industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Broadcasting Stocks

Want to learn more about Broadcasting stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 3 Undervalued Broadcasting Stocks for Monday, September 16
• 3 Undervalued Broadcasting Stocks for Friday, September 13
• Why AMC Networks Inc’s (AMCX) Stock Is Up 5.33%
• Why Sinclair Inc’s (SBGI) Stock Is Up 6.15%

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.