Time Warner Inc (TWX): Today's Featured Services Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Time Warner ( TWX) pushed the Services sector lower today making it today's featured Services laggard. The sector as a whole closed the day down 1.3%. By the end of trading, Time Warner fell 83 cents (-1.8%) to $44.99 on average volume. Throughout the day, 7.1 million shares of Time Warner exchanged hands as compared to its average daily volume of 7.6 million shares. The stock ranged in price between $44.99-$46.12 after having opened the day at $45.69 as compared to the previous trading day's close of $45.82. Other companies within the Services sector that declined today were: Swisher Hygiene ( SWSH), down 17.3%, RadioShack ( RSH), down 16.3%, Sport Chalet ( SPCHB), down 16.2%, and Fortune Industries ( FFI), down 14.3%.
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Time Warner Inc. operates as a media and entertainment company in the United States and internationally. It operates in three segments: Networks, Film and TV Entertainment, and Publishing. Time Warner has a market cap of $43.56 billion and is part of the media industry. The company has a P/E ratio of 17.9, equal to the average media industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Shares are up 27% year to date as of the close of trading on Monday. Currently there are 17 analysts that rate Time Warner a buy, no analysts rate it a sell, and nine rate it a hold.

TheStreet Ratings rates Time Warner as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the services sector could consider iShares Dow Jones US Cons Services ( IYC) while those bearish on the services sector could consider ProShares Ultra Short Consumer Sers ( SCC).

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