Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Ascent Capital Group Inc (ASCMA): Solid Investment or Sugary Speculation?

Ascent Capital has declined by 20% in 2015 and its latest earnings report was subpar as the company missed its revenue estimate by about $500,000, though it reported EPS on par with estimates. Still, analysts have an upbeat outlook on the stock with a mean and median price target of $55.00 – suggesting 30% upside from the current price of $42.13 – according to S&P Capital IQ. Even the low estimate of $45.00 is above Ascent Capital’s current share price of $42.00. As most small-cap stocks, though, Ascent Capital is thinly covered, with just three analysts reporting target prices. Zacks Research points out that revisions to the company’s estimates have been positive, however, and it rates Ascent Capital as a buy.

Although hedge funds and analysts seem to be bullish on Ascent Capital Group Inc (NASDAQ:ASCMA), it is a tough company to gauge as it has reported losses the last three years and is on track to do so again this year. Therefore, going along with hedge funds and taking heed to analyst advice may not be warranted in this case. Ascent Capital could be an acquisition candidate and an industry consolidation play, but that is more in the realm of speculation than it is in investment. Hedge funds and analysts have more access to company management, so they can best gauge the future prospects of this company. They seem positive now, but their sentiment could turn quickly. If an investor does decide to mirror hedge funds and follow analysts into Ascent Capital, he or she should monitor hedge fund activity, insider transactions, and analyst ratings extremely closely, even more so with Ascent Capital than with other stocks due to its unprofitable nature and thin coverage. That is not to say that Ascent Capital shares will not rise or the company will not be profitable in the future, it is just to say that it is difficult to discern based on past performance.

Disclosure: None

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.