2024-05-17 08:45:00 ET
Summary
- Nexstar Media Group stock has historically performed better in odd years compared to even years since 2003. The divergence in performance between odd and even years is staggering.
- After identifying this trend and publishing my findings in 2021, I thought Nexstar was well-positioned to beat the market, which it has done.
- Today, after evaluating the long-term growth prospects for Nexstar, I believe it's time to re-rate NXST stock as my findings suggest the company's growth will be lackluster going forward.
Nexstar Media Overview
In January 2021, while President Biden's victory over Donald Trump was still fresh in the minds of investors, I initiated coverage on Nexstar Media Group, Inc. ( NXST ) and revealed an interesting statistic regarding the performance of NXST. To my surprise, I found that Nexstar stock has performed substantially better in odd years compared to even years going back to 2003. After evaluating the performance each year from 2003 to 2020, I did a simple calculation to show readers the massive divergence between the stock performance in even and odd years. Summarizing my findings, I wrote:
Let's assume two investors used $10,000 in capital to invest in Nexstar stock. Investor 1 bought the stock on the first trading day of 2003 and liquidated his entire position on the last day of 2003. At the beginning of the next odd year (2005), he used the realized investment value at the end of 2003 to repeat this trade. This trade was repeated in every odd year thereafter.
Investor 2, on the other hand, bought the stock on the first trading day of 2004 and sold his entire stake on the last trading day of 2004. At the beginning of the next even year (2006), he used the realized investment value at the end of 2004 to repeat this trade. This trade was repeated in every even year thereafter. Illustrated below is the final value of the initial $10,000 used for this trade as of Dec. 31, 2020.
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For further details see:
Nexstar Media Stock: Time To Sell And Never Look Back