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Should Value Investors Buy MSG Networks (MSGN) Stock?

Zacks Equity Research

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is MSG Networks (MSGN). MSGN is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

MSGN is also sporting a PEG ratio of 2.15. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. MSGN's PEG compares to its industry's average PEG of 2.60. Within the past year, MSGN's PEG has been as high as 2.58 and as low as 0.71, with a median of 0.88.

Finally, investors should note that MSGN has a P/CF ratio of 6.38. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. MSGN's P/CF compares to its industry's average P/CF of 12.38. Over the past year, MSGN's P/CF has been as high as 9.94 and as low as 5.33, with a median of 7.90.

These are just a handful of the figures considered in MSG Networks's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that MSGN is an impressive value stock right now.

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