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Jim Cramer: Don’t Buy TEGNA Inc (NYSE:TGNA)

Fahad Saleem
·4-min read

We recently published the list of 11 stocks Jim Cramer is bearish on. TEGNA Inc (NYSE:TGNA) ranks 9th in the list. In this article we will take a deeper look at TEGNA Inc (NYSE:TGNA) and find out whether Cramer's thesis holds any weight.

Jim Cramer in a latest program said the "bulls" want the economy to slow down, they want rate cuts as well as a strong demand so that "their companies" won't have to worry about the yield curve and macroeconomic situation. Cramer highlighted that all of this is confusing, as it's not possible to have a weaker economy and yet see companies make a lot of money. Cramer also pointed to the latest data showing slowing manufacturing activity. The Institute for Supply Management's manufacturing purchasing managers index fell to 48.7 in May from 49.2 in April, while analysts were expecting the index to jump to 49.5. Cramer said that the economic activity in the manufacturing sector contracted for the 18th time in the last 19 months. Cramer said the new orders contraction in May was a "little over frightening."

Talking about the energy sector, Cramer said that he'd buy oil and gas stocks as the economy would sooner or later begin to get back to normal. Cramer also said that it's surprising to see many retailers, including Dick's Sporting Goods, GAP and Best Buy, performing exceptionally well. Cramer also talked about a Wall Street analyst who "double upgraded" Best Buy shares, saying the company "might be the biggest beneficiary" of the AI PCs boom. Cramer said he agrees with this thesis.

For this article we watched several latest programs of Jim Cramer and picked 11 stocks he's bearish on. With each stock we have mentioned hedge fund sentiment. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

TEGNA Inc (NYSE:TGNA)

Number of Hedge Fund Investors: 28

Virginia-based media company TEGNA Inc (NYSE:TGNA) is one of the stocks Jim Cramer thinks you should not buy. When asked about TEGNA Inc (NYSE:TGNA) in a program on CNBC last week, Cramer said the following:

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"This is a TV station. I just don’t care about anything involving linear TV. This is not where I want to be. I'm sorry."

Cramer might be bearish on the stock, but TEGNA Inc (NYSE:TGNA) shareholders are rejoicing these days as TEGNA Inc (NYSE:TGNA) last month announced a whopping 9.8% increase in its quarterly dividend. The new dividend would be $0.125 per share.  However, analysts are skeptical of TEGNA Inc's (NYSE:TGNA) long-term growth amid cord-cutting and loss of subscribers. In the short term, though, TEGNA Inc (NYSE:TGNA) is expected to remain strong. It owns 64 local affiliates across 51 markets.  Analysts are also expecting TEGNA Inc (NYSE:TGNA) to benefit from the rise in political ad spending this year ahead of elections.

Based on its 2025 EPS estimate of $2.13, Tegna has a forward P/E of 7, much lower than the sector median of 12.32. One-year average analyst price estimate for TEGNA Inc (NYSE:TGNA), according to data from Yahoo Finance, is $19.13, which presents an upside potential of 28% from the current levels.

Overall, TEGNA Inc (NYSE:TGNA) ranks 9th among the 11 Stocks Jim Cramer Doesn't Like. You can visit Jim Cramer Says You Should Not Buy These 11 Stocks to see the other stocks that Jim Cramer is bearish on. While we acknowledge the potential of TGNA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: Michael Burry Is Selling These Stocks and Jim Cramer is Recommending These Stocks.

Disclosure: None. This article is originally published at Insider Monkey.