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Alberto Abaterusso
Alberto Abaterusso
Articles (1913) 

Reduce Your Exposure to These 2 Disappointing Stocks

Analysts recommend selling shares

January 14, 2020 | About:

Shareholders of Sprint Corp. (NYSE:S) and MSG Networks Inc. (NYSE:MSGN) have ample reason to feel dissatisfied with their holdings.

First of all, these two stocks have underperformed the S&P 500 Index in recent years. While the index grew 27.3% over the past year, 44.8% over the past three years and 60.3% over the past five years through Jan. 13, these two stocks underperformed significantly.

Second, these stocks don’t pay dividends.

Third, Wall Street sell-side analysts recommend easing exposure to these stocks.

Sprint

Shares of Sprint have dropped 20% in the past year, 45.2% in the past three years and rose by only 19.5% in the past five years through Jan. 13, underperforming the S&P 500 by 47%, 90% and 40.8%.

The Overland Park, Kansas-based telecommunication services provider stopped paying dividends more than 12 years ago.

Wall Street sell-side analysts issued a moderate sell recommendation rating for the stock and established an average target price of $5.05 versus Monday’s closing share price of $4.89. The stock has a market cap of around $19.92 billion.

According to the Peter Lynch chart, Sprint is overvalued.

The 14-day relative strength index of 27 suggests the stock is oversold.

GuruFocus assigned a low rating of 4 out of 10 for both the company’s financial strength and its profitability.

MSG Networks

Shares of MSG Networks have fallen by 35.8% in the past year, 28.7% over the past three years and by 31.02% over the past five years, underperforming the S&P 500 Index by 54.3%, 73.5%, and 91.3%.

The New York-based regional cable and satellite television network does not pay a dividend.

Wall Street sell-side analysts issued a moderate sell recommendation rating for MSG Networks with an average target price of $15.33 versus Monday’s closing share price of $15.66. The stock has a market cap of $941.93 million.

According to the Peter Lynch chart, the stock looks cheap due to the sharp deterioration in its market value in recent years.

In fact, the 14-day relative strength index of 31 indicates the stock is almost oversold.

GuruFocus assigned a moderate rating of 4 out of 10 for the company's financial strength and a high rating of 8 out of 10 for its profitability.

Disclosure: I have no positions in any securities mentioned.

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About the author:

Alberto Abaterusso
If somebody asks what being a value investor means, Alberto Abaterusso would answer, “The value investor is not just the possessor of the security that represents the company, but he is the owner of that company. As an owner of the company the value investor is actively involved in the dynamics of that company and his first concern is how to have sales progressively growing. Also, the value investor is probably one of the most demanding persons in the world concerning sales.”

Abaterusso is a freelance writer based in The Netherlands. He primarily writes about gold, silver and precious metals mining stocks. His articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. Alberto holds an MBA from Università degli Studi di Bari (Italy), Aldo Moro.

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