21st Century Fox: Zacks’ Bear of the Day PLay

I don’t discriminate when it comes to my stock picks. I don’t care if the company makes medication, runs a website, prints newspapers or rolls tobacco. That’s the pure American capitalist in me. It’s also why I buy all sorts of different company stocks. To me, what’s important is the Zacks Rank, the Style Scores, the Industry Rank and the technical chart. If I had a longer timeframe I’d go find story stocks that are revolutionizing industries and changing the way we think. But the Zacks Rank is about the here and the now so I adjust accordingly.

Good news is this unbiased view of the market allows me to develop a bearish bias without really haven’t any trouble with the underlying business. When I write a Bear of the Day, all I’m doing is pointing out a stock that has had some earnings estimate revisions to the downside lately with a chart that looks a little haggard. That’s what we have here with 21ST Century Fox (FOXSnapshot Report). FOX is involved in creating and distributing media services. Its business portfolio consists of cable, broadcast, film, pay TV and satellite assets.

FOX hasn’t been in the good graces of the Zacks Rank, checking in today as a Zacks Rank #5 (Strong Buy) and rocking a Momentum Style Score of “F.” Also, the industry is in the Bottom 37% of our Zacks Industry Rank. The reason for the bearish ranking is a recent analyst earnings estimate revision to the downside for the current quarter and next year. The bearish outlook has dropped the Zacks Consensus Estimate for the current quarter down to 37 cents from 44 cents and pushed down next year’s number from $2.07 all the way down to $1.94.

The bearish sentiment is evident in the stock chart here as well. Shares have fallen from a 52-week high near $38 to the bottom end of a consolidation range here at $31.80. Currently shares are trading below a negatively sloped 21 day moving average that’s camped out at $32.57. That’s provided topside resistance since the stock initially dropped below the average in early June. The commodity channel index is a bit oversold as you’d expect, further confirming the bearish trend at -80.89. If shares violate the bottom end of the range the next support sits at the mid-October low just above $30.

Investors looking to add a position within the same industry should turn to Zacks Rank #1 (Strong Buy) IMAX Corp (IMAXAnalyst Report) or Zacks Rank #2 (Buy) News Corp (NWSAAnalyst Report). 

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