If I’d invested £1,000 in ITV shares 1 year ago, here’s how much I’d have now!

ITV (LSE: ITV) shares dipped into penny stock territory in March 2022 and have yet to recover above £1. With the stock at almost 86p today, what would my return be if I invested in it FTSE 250 company a year ago?

Let’s take a look at the numbers and explore my view of the business today.

A year back

A year ago, ITV could be sold for 114.80 US Dollars. Despite making an impressive rebound from its lows in September, the stock is still down 25% since February 2022.

I haven’t invested in companies before, but I find it’s always useful to use past performance as an investment guide – even if it doesn’t guarantee future returns.

If I have put £ 1,000 lump into the stock 52 weeks ago, I could have bought 871 shares, with 9p left in exchange for the reserve.

As I write, my shareholding will be worth £748.19. Thanks to the healthy dividend yield, I was also able to add £43.55 in passive income to my total return.

Therefore, I will get £791.83 from my original £1k investment now. It was a disappointing result. But does that mean ITV shares could be a buy today?

ITV share price changes

I think the coming year could prove to be better for the media business than the previous one. Using the price-to-earnings ratio as a valuation metric, the stock looks quite cheap at 7.33 times.

Perhaps the most exciting development for the company is the new free streaming service ITVX. Helped by December’s FIFA World Cup, ITV’s streaming hours grew by 55% year-on-year. ITVX also allows viewers to watch popular shows such as Love Island and Coronation Street.

The platform offers broadcasters multiple revenue streams. CEO Carolyn McCall claims the new service has “landed very well” with advertisers. Viewers can also choose to remove adverts through a subscription service that costs £5.99 a month, which is also included in the Britbox package.

In addition, the business is showing signs of rebound in other divisions. Despite the heavy losses during the pandemic, ITV Studios – the company’s television production and international distribution – is expected to produce a record for FY 2022.

There are reports that Hollywood producers and French production companies are considering taking a strategic interest in ITV Studios, which was valued at more than £2.5bn by analysts last year. This could translate into positive momentum for the share price once a deal is reached.

Admittedly, businesses face the risk of a potential reduction in advertising expenditure, especially if the UK economy falls into recession this year in line with the new IMF forecast. That being said, I think the stock looks oversold right now after a tough few years.

I want to buy?

I am optimistic about the future for ITV’s share price. Although the trailing 12-month returns are not pretty, the stock looks like a value investment proposition to me today.

Ultimately, if everything goes well, the company can return to FTSE 100. In this scenario, additional capital flows from passive investors can help lift the stock.

With some cash I’d invest in ITV today.