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Should Value Investors Buy TEGNA Inc. (TGNA) Stock?

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Zacks Equity Research
·2 min read
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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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

TEGNA Inc. (TGNA) is a stock many investors are watching right now. TGNA is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

We also note that TGNA holds a PEG ratio of 0.97. 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. TGNA's industry currently sports an average PEG of 2.44. Over the last 12 months, TGNA's PEG has been as high as 1.03 and as low as 0.46, with a median of 0.75.

Finally, investors will want to recognize that TGNA has a P/CF ratio of 8.69. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 23.95. Over the past year, TGNA's P/CF has been as high as 9.85 and as low as 5.29, with a median of 6.86.

Value investors will likely look at more than just these metrics, but the above data helps show that TEGNA Inc. Is likely undervalued currently. And when considering the strength of its earnings outlook, TGNA sticks out at as one of the market's strongest value stocks.


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