What Are These 2 Stocks Telling Us? – MSG Networks Inc. (MSGN), Ceridian HCM Holding Inc. (CDAY)

MSG Networks Inc. (NYSE: MSGN) shares are -44.94% down in the year-to-date (YTD) period and have moved -1.64% or -$0.16 lower in the latest trading session. However, stock’s trailing 12-month performance remains nearly +12.51% lower. Comparatively, the stock is -45.44% down YTD and -25.91% over the trailing 3-month period. If we look at the shorter duration, its week performance is -6.81% and -3.33% over the month.

Analyst Recommendations

On June 25, 2020, Wolfe Research recommended the MSGN stock is a Underperform, while earlier, Guggenheim had Upgrade the stock as a Neutral on August 14, 2020. 7 analysts offering the recommendations for the stock have a consensus rating of 3.40 to suggest that the MSGN stock is a “Hold. 3 of the 7 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 1 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $9.58 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $12.71. The forecasts give the MSG Networks Inc. stock a price target range of $13.00 on the higher side while at least one analyst think the stock could plunge to a low of $8.00. The two limits represent an upside potential of 26.31% or -19.75%.

Earnings Forecast

Analysts estimate the earnings to increase 49.20% in the current quarter to $0.64, up from the $0.57 reported in the same quarter a year ago. For the current year, earnings should grow to an average of $2.64, down -2.30% from $2.95 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between $0.48 and $0.65. Wall Street estimates earnings per share to be at an average of $2.45 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 12 over the last 12 months, while SEC filings reveal that there have been 24 insider sales over the same period. Insiders have purchases 184,085 shares while those sold by company executives and officers stand at 297,248. The last 3 months have seen insiders trade a total of 113,496 and 139,628 in purchases and sales respectively.

DARINO-GORSKI DAWN, a SVP, Controller & PAO at the company, sold 20,000 shares worth $0.2 million at $10.12 per share on Aug 18. The President and CEO had earlier sold another 25,000 MSGN shares valued at $0.26 million on Aug 18. The shares were sold at $10.34 per share. RICHTER BRET (EVP, CFO & Treasurer) sold 19,214 shares at $10.78 per share on Aug 17 for a total of $0.21 million while GREENBERG ANDREA, (President and CEO) sold 35,991 shares on Aug 17 for $0.4 million with each share fetching $10.99.

Ceridian HCM Holding Inc. (NYSE:CDAY), on the other hand, is trading around $83.68 with a market cap of $12.01B and analyst research firms have a positive stance on its shares. Analysts predict that the stock will reach $84.29 and spell out a more modest performance – a 0.72% return. Some analysts are even forecasting $0.41 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the Ceridian HCM Holding Inc. (CDAY) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

CDAY’s operating margin was positive on the trailing 12 months basis, remaining steady at 2.70%, while the operating expenses over the recent quarter were at $74.6 million. This represented a 61.27% of the company’s total revenues which amounted $192.6 million. With this in place, we can see that the company’s diluted EPS inclined $0.04 on the year-over-year period, growing to $0.04 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Sep 2020), the total assets figure advanced to $5.85 billion from $6.47 billion over the previous quarter. The cash flow from operating activities totaled $23.9 million, significantly higher than the $10.2 million reported in the year-ago quarter. The company’s free cash flow for the quarter was -$5.8 million.

Insider activity

Insiders have transacted a total of 47 times at Ceridian HCM Holding Inc. over the last 6 months, with insider purchases undertaken 28 times and accounting for 1,269,052 shares. Insider sales totaled 29,734,969 shares over the same period, with these deals completed in 19 transactions. Looking at these numbers, we realize that net purchases over that period are 9.0 shares. Insiders now hold a total of 20.7M shares after the latest sales, with -43.60% net shares purchased.

Major holders

Insiders own 0.60% of the company shares, while shares held by institutions stand at 89.51% with a share float percentage of 138.82M. Investors are also buoyed by the number of investors in a company, with Ceridian HCM Holding Inc. having a total of 293 institutions that hold shares in the company. The top two institutional holders are Price (T.Rowe) Associates Inc with over 20.93 million shares worth more than $1.66 billion. As of Jun 29, 2020, Price (T.Rowe) Associates Inc held 14.25% of shares outstanding.

The other major institutional holder is Capital Research Global Investors, with the investment firm holding over 17.7 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $1.4 billion and represent 12.05% of shares outstanding.