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 0.1%. By the end of trading, Time Warner fell 65 cents (-1.4%) to $46.05 on heavy volume. Throughout the day, 11.6 million shares of Time Warner exchanged hands as compared to its average daily volume of 6.4 million shares. The stock ranged in price between $46-$46.81 after having opened the day at $46.71 as compared to the previous trading day's close of $46.70. Other companies within the Services sector that declined today were: Pandora Media ( P), down 17.5%, Sino-Global Shipping America ( SINO), down 12.7%, LodgeNet Interactive Corporation ( LNET), down 11.7%, and Mitcham Industries ( MIND), down 11.6%.
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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 $44.31 billion and is part of the media industry. The company has a P/E ratio of 17.7, equal to the S&P 500 P/E ratio of 17.7. Shares are up 29.5% year to date as of the close of trading on Tuesday. Currently there are 15 analysts that rate Time Warner a buy, no analysts rate it a sell, and 10 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, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

On the positive front, Net one Ueps Technologies ( UEPS), up 25.8%, Coastal Contacts ( COA), up 20%, TOP Ships ( TOPS), up 15.8%, and SUPERVALU ( SVU), up 13.7%, were all gainers within the services sector with CH Robinson Worldwide ( CHRW) being today's featured services sector leader.

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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