Time Warner Inc (TWX): Solid Fundamentals

Company Profile:

Time Warner Inc. operates as a media and entertainment company in the United States and internationally. It operates through three segments: Turner, Home Box Office, and Warner Bros. The Turner segment owns and operates a portfolio of cable television networks and related properties that offer entertainment, sports, kids, and news programming on television and digital platforms for consumers. The Home Box Office segment provides premium pay and basic tier television services comprising HBO and Cinemax; and sells its original programming through DVDs, Blu-ray discs, and electronic sell-through, as well as licenses home entertainment and content to international television networks and SVOD services. The Warner Bros. segment produces, distributes, and licenses television programming and feature films; distributes digital and physical home entertainment products; and produces and distributes videogames, as well as licenses consumer products and brands. Time Warner Inc. was founded in 1985 and is headquartered in New York, New York.

Recent News:

The Company continues to expect its 2015 full-year Adjusted Diluted Income per Common Share from Continuing Operations (“Adjusted EPS”) to be in the range of $4.60 to $4.70.

For its first quarter ended March 31, 2015, revenues increased 5% to $7.1 billion due to growth across all divisions. Adjusted Operating Income grew 12% to $1.8 billion due to growth at Turner, offset in part by declines at Warner Bros. and Home Box Office. Operating Income decreased 13% to $1.8 billion primarily due to a $441 million gain in the prior year quarter in connection with the sale and leaseback of the Company’s space in Time Warner Center.

its Board of Directors declared a regular quarterly cash dividend of $0.35 per share of Common Stock, payable in cash on June 15, 2015 to shareholders of record on May 31, 2015.

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

TWX’s strengths can be seen in its better growth, better solvency and strong profitability. Its revenue and net income have increased over several years. Technical indicators signal the bullish signs, as there is a bullish cross in MACD and Stochastic Oscillator. RSI is increasing to 55.24. The P/BV ratio indicates it is undervalued compared to the average P/BV ratio of of the industry and the sector. We rate Time Warner Inc. (TWX) a Strong BUY.