Sell: MSG Networks (MSGN)
From Ian Wyatt’s Million Dollar Portfolio
Updated from Investment Digest 760, August 20, 2014 (recommendation of parent, MSG)
Last year, we received shares of MSG Networks (MSGN) when the company was spun off from Madison Square Garden (MSG). MSG Networks is the cable station that broadcasts sporting and other events from the Madison Square Garden venue in New York City.
The company recently reported decent quarterly financial results. Sales grew 6% and operating cash flow increased 13% from the year-earlier quarter.
MSG Networks stock is cheap, trading at just nine times earnings. But the consensus analyst outlook for MSG Networks calls for sales to increase just 3% in the next year, with EPS unchanged. That means relatively little future growth for this cable station.
After several months of holding MSG Networks stock, I’ve decided to sell the position. The reason is that there aren’t any specific catalysts on the horizon that will unlock value in this stock. Plus, with slow growth there is little reason to think this stock will be a strong performer in the next year.
I’ll continue to hold onto shares of Madison Square Garden, which owns the arena and the New York Knicks and Rangers.
Ian Wyatt, Ian Wyatt’s Million Dollar Portfolio, www.100kportfolio.com, June 3, 2016