Entertainment related companies control vast media empires that can influence millions of viewers.
Not only do they produce content, but they also have a significant wait in advertisement if they control their own networks. Companies like Disney can also have derivative products that can produce significant cash-flow. These companies are able to shape culture by their offerings and what they decide to produce.
The Entertainment industry has been in deep transformation for years. It’s shaken up by streaming players and technology companies that are now getting into Entertainment Production. Netflix, Apple, Amazon and the likes are now as much content producers as technology companies.
Who is building the next Media Empire?
Here is a quick overview of the top entertainment production companies stocks you should watch…à
🎬 Entertainment Production
Cineplex Inc (CGX-T)
It looks like they are going to be bought by a UK company. The stock price surged on the announcement, although there is a long period before the deal closes and Cineplex still has a chance of finding a higher bid. They offer a sustainable dividend thanks to theatre traffic remaining constant and with other additions to their revenue stream.
It's a very difficult story. People will take time returning to the cinemas. Cineplex did a good job offering ancillary services. Also, film studios like Disney are rethinking how they will exhibit movies (i.e. streaming). Will the Marvel blockbusters return to big screens?
Netflix Inc. (NFLX-Q)
Netflix is the online streaming service that most people know and use. It’s still one of the staples of the online streaming offerings. The space is starting to get crowded with Disney+ and Apple TV+ entering the arena. Their focus on their in-house content, which has won awards and keeps subscribers, will be key as the content war ramps up.
Fractional shares to buy instead of playing the short squeeze of GameStop, AMC, etc. It was accelerating before the pandemic, and has become the standard for TV viewing now.
The iPhone has been a staple in Apple’s line and has been their key product for some years. Now, they are building off their hardware to move into services such as News+ and TV+. Although there isn’t a load of content, more is in their pipeline. They have the budget to make high quality shows, and their advantage of being ingrained in the Apple ecosystem could be a major advantage.
A core tech/consumer product holding of his. It's taking a breather with all momentum stocks that led in 2020. The rise in bond yields, driving the current rotation, is hitting these tech names hard, though Apple not too badly. He likes Apple for its ecosystem based on a solid consumer base that continues to upgrade…
Discovery Communications Inc (DISCB-Q)
A US based media company, that most people will know. Their most well-known network in their collection is probably the Discovery Channel. They also do partnerships and buy distribution rights for sports broadcasting.
(A Top Pick June 29/15. Down 17.81%.) The worry is that prior to buying Eurosport, they may not have the best properties and will lose some subscribers to competition, and money they get from distributors will decrease. They will be reporting shortly, and depending on that he may get back into the name.
IMAX Corp. (IMAX-N)
The stock chart has closely resembled that of Cineplex with pressure from changing consumption patterns. People are watching movies at home rather than going to the cinema. The stock has been range-bound for some time. They are moving into China so there is a chance the stock may pick up.
Cineplex has a similar chart with pressure on the cinema business. IMAX is dead money, until it breaks above $24. It's been range-bound since mid-2017. You can start a small position and see it the breakout happens.
A dividend favourite that has good cash flow. They bought Time Warner, who is a major player in distribution, and production of shows and films. Analysts expect the dividends to continue and the stock is great for those looking for income.
Comcast Corp (CMCSA-Q)
A cable and broadband operator. It’s the largest cable company in the U.S.. Cord-cutting is a major challenge for this company, although they are the infrastructure that supports access to online content, so the growth of streaming services can counteract the cord-cutters.
He likes it. Known from providing high-speed internet in the U.S. which enjoys high barriers to entry. Good cash flow. Problem here are the theme parks it owns, down 70% in attendance because of Covid; they may even close down. The broadband business is doing very well, undervalued and Comcast will do well in the…
Walt Disney (DIS-N)
The Disney+ streaming service has given the stock a boost. The deal with 20th Century Fox was taken positively by analysts. It is currently trading at 20x earnings and is well-positioned to be a competitor to Netflix.
(A Top Pick Feb 14/20, Up 41%) Price target of $204. A bit left in the tank. He's taken a bit of profit and would buy again at a lower level.
CBS Corp (CBS-N)
An American mass media corporation. They are in commercial broadcasting, publishing and television production. A value play. However, they have faced headwinds from cord-cutting in cable.
(A Top Pick April 6/17, Down 25%) A likely deal with Viacom; short-term highly accretive, but long-term faces cord-cutting in cable. This is one of his worst picks.
Live Nation Entertainment Inc. (LYV-N)
A global entertainment company that came out of a merger between Live Nation and Ticketmaster. A top concert venue and ticketing company in the world. It recently found a short term bottom.
Twenty-First Century Fox Inc (FOX-Q)
A Mass media corporation that is global. They regularly buyback stocks and bring value back to investors. They have many different interesting assets, including sports so it is worth a closer look.
The Stars Group The regulation of internet sports betting in the U.S. has been a pushback and he doesn't know how it'll resolve itself. TSGI just partnered with Fox Sports and Fox has other interesting assets, so this is a better way of playing online gambling.
A cloud service, e-commerce, and media company that is synonymous with North American online shopping. The Prime package gives access to a host of different services, including Amazon Prime Video. The service has original content as well as some well-known shows and movies. The content is bundled with the prime subscription, which may help buoy their entertainment business.
Fractional shares to buy instead of playing the short squeeze of GameStop, AMC, etc. Neither a reopening or lockdown stock. AMZN is being dumped in the current rotation as Wall Street considers this a lockdown stock. They're wrong. He predicts a fabulous year for Amazon. The pandemic has permanently changed consumer behaviour. Costs will fall…