Fox News (FOX) shook the news world up Monday morning announcing long-standing host Tucker Carlson’s departure from the network. As a result, FOX shares dropped nearly 5% in yesterday’s trading sessions, resulting in a $962 million loss in market value.
The company’s press release claims this was a mutual parting, but it’s generally believed that there is more to the story – and these details will come out with time.
Right now, though, people are shocked by the move. Carlson has been the face of right-wing television news at Fox for more than 14 years. And, he wasn’t even given the opportunity to give a send-off to his viewership, as he was only told of the news 10 minutes before it was released. Celebrities like our 45th president Donald Trump were outraged by the news – and he’s not alone.
On the other hand, many individuals claim this is long overdue – with one Fox News reporter expressing their relief that the network had the moxie to cut ties with Carlson, referring to him as “bombastic”.
But – regardless of which side of the fence you fall on, one thing is for sure: Fox News is going to take a hit. We’ve already seen the start of this in yesterday’s trading session, but other experts say the worst is yet to come. The long-term impact could be far more detrimental to the company than executives may realize.
Brandon Nispel, an analyst at KeyBanc Capital Markets, says the network is going to have trouble filling gaps in its programming and viewership with the ousting of Carlson. Moreover, advertising upfronts are on the horizon, scheduled for May. It’ll be interesting to see what Fox tells their advertising partners in regard to the inevitable drop in viewership with Carlson gone.
With that said, it will all come down to who replaces Carlson – and whether the original viewership is willing to get behind them or not. For now, investors of Fox may be wondering whether this is a signal to get out of the stock before a bigger shift comes.
Take a look below through the VectorVest stock analyzing software and see 3 important considerations before making your next move.
While FOX Has Very Good Upside Potential, the Safety & Timing are Poor Now
The VectorVest system helps you simplify your trading strategy by giving you all the information you need in just 3 simple ratings. These are relative value (RV), relative safety (RS), and relative timing (RT).
Each rating sits on its own scale of 0.00-2.00, with 1.00 being the average. By picking stocks with ratings appreciating above the average, you can win more trades with less work. Better yet, though, VectorVest offers a clear buy, sell, or hold recommendation based on these ratings. As for FOX, here’s what you need to know…
- Very Good Upside Potential: Despite the concern over Fox News’ future, the stock has a very good RV rating of 1.30 right now. This is a comparison of the stock’s 3-year price projection alongside AAA corporate bond rates and risk. And, the stock is undervalued as it currently sits at a price of $29/share. The current value is $42.
- Poor Safety: In terms of risk, though, FOX has poor safety - as evidenced by the RS rating of 0.67. This is calculated by analyzing the company’s financial consistency & predictability, debt-to-equity ratio, and business longevity.
- Poor Timing: As you can see from yesterday’s trading session, the timing is poor for FOX right now - with an RT rating of 0.79. This is based on the direction, dynamics, and magnitude of the stock’s price movement. It’s taken day over day, week over week, quarter over quarter, and year over year.
The overall VST rating of 0.93 is fair for FOX - but, is it enough to earn the stock a buy recommendation? Or, does the poor safety and timing outweigh the very good upside potential for this stock?
Don’t play the guessing game or let emotion influence your next move. Get a clear answer on what you should do next with FOX through a free stock analysis at VectorVest today!
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VectorVest advocates buying safe, undervalued stocks, rising in price. As for FOX, it has very good upside potential even after the Carlson ousting - but that’s where the good news ends. Currently, the stock has poor safety and timing weighing it down.
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