Factors in CenturyLink Inc's (NYSE:CTL) current Strong Sell recommendation is analytical scoring that is below average, a ranking in the company's industry group that is in the bottom eighth, a ranking in its sector group that is in the bottom eighth, and a quantitative risk/reward calculation that is unattractive. CTL derives some benefit of being in a sector that is ranked above average in investment attractiveness; however, its industry group is ranked below average in attractiveness which may counterbalance this in whole or in part. CTL is rated as a Strong Sell by means of the Portfolio Grader stock evaluator. The methods for fundamental and quantitative metrics used in this analytical tool researches and ranks nearly 5,000 stocks each week. The current Portfolio Grader recommendation on the shares has been in place for 7 months.
As one of the 72 companies in the GICS Communications sector CTL is a member of the 27 company Specialty Telecommunications GICS industry group within this sector. The market value of CTL is $9.7 billion which places it in the top quarter of its industry group The stock's current Portfolio Grader ranking places it 26 among the 27 companies in this industry group, a position that is well below-average.
Currently, Portfolio Grader ranks the Communications sector number 8 among the 20 sectors in its universe putting it in the second quartile of all the GICS sectors. The Specialty Telecommunications industry group is ranked 79 among the 129 industry groups within the GICS sectors, placing it below-average in terms of the Proprietary Quantitative Score scoring system.
CenturyLink has achieved below-average scores in 7 of the 8 fundamental areas analyzed by Portfolio Grader in the ranking of company stocks.
CTL's operational scores are a source of great concern with a ranking for sales growth, operating margin and earnings growth that are considerably below average. Scores for visibility of earnings are mixed, with a ranking for earnings revisions that is much worse than average, and scores for earnings surprises and earnings momentum that are worse than average and much better than average respectively. CTL's grades for cash flow and return on equity are worse than its industry group average. Based on these fundamental scores, CenturyLink places in the bottom quartile of the industry group.
Quantitatively, Portfolio Grader uses the Proprietary Quantitative Score to gauge CTL's shares from the viewpoint of risk/reward. This proprietary scoring system weighs the relative value of the company's shares based on the recent $16.2 share price of the shares relative to its peers, the market and risk associated with its industry and sector groups. Using this risk/reward calculation, CTL currently scores well below-average in its industry group compared to its peers.
The Proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results, with A being 'strong buy' and F being 'strong sell'. Explore the tool here.
Commentary provided by UpTick Data Technologies.