By Rob Otman
Twenty-First Century Fox (Nasdaq: FOX) is a $53 billion company today. Investors that bought shares one year ago are sitting on a -3.63% total return. That’s below the S&P 500’s return of 18.9%.
Fox stock is underperforming the market. It’s beaten down, but it reports quarterly earnings tonight. So is it a good time to buy? To answer this question we’ve turned to the Investment U Stock Grader. Our research team built this system to diagnose the financial health of a company.
Our system looks at six key metrics…
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Earnings-per-Share (EPS) Growth: Fox reported a recent EPS growth rate of 35.29%. That’s above the media industry average of 24%. That’s a great sign. Fox’s earnings growth is outpacing competitors.
Price-to-Earnings (P/E): The average price-to-earnings ratio of the media industry is 33.21. And Fox’s ratio comes in at 14.37. It’s trading at a better value than many of its competitors.
Debt-to-Equity: The debt-to-equity ratio for Fox stock is 123.31. That’s above the media industry average of 95.32. That’s not a good sign. Fox’s debt levels should be lower.
Free Cash Flow per Share Growth: Fox’s FCF has been lower than its competitors over the last year. That’s not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.
Profit Margins: The profit margin of Fox comes in at 11.14% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Fox’s profit margin is above the media average of -1.21%. So that’s a positive indicator for investors.
Return on Equity: Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for Fox is 21.39%, and that’s above its industry average ROE of 16.68%.
Fox stock passes four of our six key metrics today. That’s why our Investment U Stock Grader rates it as a buy with caution.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth. For more details, click here.
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Source:: Investment You
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