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Is AMC Networks (AMCX) a Great Value Stock Right Now?

Zacks Equity Research
GoPro (GPRO) closed the most recent trading day at $5.77, moving -1.87% from the previous trading session.

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is AMC Networks (AMCX). AMCX is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Investors should also note that AMCX holds a PEG ratio of 0.94. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AMCX's industry currently sports an average PEG of 1.55. Over the past 52 weeks, AMCX's PEG has been as high as 1.37 and as low as 0.63, with a median of 0.93.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AMCX has a P/S ratio of 1.1. This compares to its industry's average P/S of 1.4.

These figures are just a handful of the metrics value investors tend to look at, but they help show that AMC Networks is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AMCX feels like a great value stock at the moment.


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