10 Best Media Stocks To Buy Now

In this article, we discuss the 10 best media stocks to buy now.

Over the past few years, the media industry evolved from traditional theatres to online digital streaming channels. Like many other sectors, the media industry was hit hard by the pandemic in 2020, causing production delays. Moreover, even after one year of the pandemic, over a quarter of all theatres in the U.S. stayed closed, as per the government’s instructions. According to a report published by PWC, theatre box office revenue fell by 71% in 2020. However, the shift to digital media bode well for the industry, offering good investment opportunities.

The U.S. media industry is the largest in the world, accounting for $660 billion of the $2 trillion worth of global market, as reported by International Trade Administration. The global media industry is expected to grow at a CAGR of 5%, reaching $2.6 trillion by 2025. The industry regained its momentum after the pandemic, fueled by demand for digital channels. As reported by Forbes, the streaming video accounted for 26% of the whole viewing in 2021 so far, compared with 25% of the broadcast TV.

S&P 500 Media and Entertainment Index gained 43.5% in the past year, compared with 34.2% gains of S&P 500 during the same period. The Covid-related threats are still lingering over the media industry as companies offering physical experiences are not likely to return to normal any time soon, according to a report by Deloitte. However, digital streaming services are bound to grow more as people spent nearly $16 billion on online streaming services in the first half of 2021, presenting a 5% growth from the same period last year, according to the data collected by The Digital Entertainment Group.

Some of the notable media stocks include Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), Netflix, Inc. (NASDAQ:NFLX), The Walt Disney Company (NYSE:DIS), and Comcast Corporation (NASDAQ:CMCSA).

Photo by Myke Simon on Unsplash

Our Methodology:

Let’s analyze our list of the best media stocks to buy now. The companies included in the list belong to the different sectors of the media industry and deal in broadcasting and online streaming services. These stocks are ranked according to the number of hedge fund positions in each of them. Along with this, we also considered analysts’ ratings and fundamentals while picking these stocks.

10 Best Media Stocks To Buy Now

10. Gray Television, Inc. (NYSE:GTN)

Number of Hedge Fund Holders: 20

Gray Television, Inc. (NYSE:GTN) is an American television broadcasting company, founded in 1946. After hitting a low of $9.49 per share in April 2020, the stock has bounced back, gaining 25% year to date.

At the end of Q2, 20 hedge funds tracked by Insider Monkey reported owning stakes in the company, compared with 25 in the previous quarter. The total value of these stakes is $101.6 million. Darsana Capital Partners is the company’s largest shareholder in Q3, owning shares worth $22.3 million.

On November 4, Gray Television, Inc. (NYSE:GTN) announced a quarterly dividend of $0.08 per share. The stock’s current dividend yield stands at 1.27%. In Q2, the company reported revenue of $547 million, up from $451 million, during the same period last year. Recently, Barrington Research lifted its price target on Gray Television, Inc. (NYSE:GTN) to $25, with an Outperform rating on the shares.

Like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), Netflix, Inc. (NASDAQ:NFLX), The Walt Disney Company (NYSE:DIS), and Comcast Corporation (NASDAQ:CMCSA), Gray Television, Inc. (NYSE:GTN) is one of the notable stocks to buy in 2021.

Number of Hedge Fund Holders: 20

8. Discovery, Inc. (NASDAQ:DISCA)

Number of Hedge Fund Holders: 44

Discovery, Inc. (NASDAQ:DISCA), an American multinational mass media company, launched its digital streaming services Discovery+, owing to its importance in the current times. The company is set to bring its streaming services to Canada, which would feature over 200 exclusive content series, making it one of the best media stocks to buy now.

In Q2, Discovery, Inc. (NASDAQ:DISCA) reported a 12% increase in its total U.S. networks revenue at $1.97 billion. The company posted a GAAP EPS of $1.01, beating the estimates by $0.50. In October, Barclays kept an Equal Weight rating on Discovery, Inc. (NASDAQ:DISCA), with a $30 price target.

At the end of Q2, 44 hedge funds tracked by Insider Monkey reported owning stakes in Discovery, Inc. (NASDAQ:DISCA).

Discovery, Inc. (NASDAQ:DISCA) is one of the notable media stocks to invest in, like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), Netflix, Inc. (NASDAQ:NFLX), The Walt Disney Company (NYSE:DIS), and Comcast Corporation (NASDAQ:CMCSA).

Silver Ring Value Partners mentioned Discovery, Inc. (NASDAQ:DISCA) in its Q2 2021 investor letter. Here is what the firm has to say:

“I established a medium position in Discovery, Inc. (NASDAQ: DISCK) stock during the quarter by means of selling the put options as I described in the last quarterly letter. The stock continued to decline in a way that I found hard to explain by fundamental factors, and the gap between price and value became quite attractive. When the put options expired I chose to keep the amount of stock roughly equal to a 10% position. My entry point was approximately 57% of my Base Case value and at approximately 8x normalized EPS for a business that I believe has the ability to grow profits at a moderate rate.

During the quarter, the company announced its plans to acquire the Warner Media business from AT&T. The transaction is structured as an all-equity deal, is expected to close in approximately a year, and Discovery’s CEO is slated to be the CEO of the combined business. The company expects to produce at least $3B in annual cost synergies without impacting content production investments.

The best way to think about the transaction is that Discovery is acquiring a strong and unique asset without paying a premium. The way that acquisitions usually work is that the buyer pays a sizable premium to the seller which frequently transfers most of the value of the synergies to the seller. In this case, the seller, AT&T, was in a difficult position. Essentially they were a forced seller, having taken on too much debt and under pressure from activist investors to simplify the portfolio. As a result, the equity ownership split between Discovery, Inc. (NASDAQ: DISCK)’s shareholders and AT&T approximates the share of pre-synergy profits contributed by the two entities, which implies no meaningful premium paid.

The acquisition has its share of risks. A few come to mind:

• Integration risk of two…[read the rest of the letter here]

7. DISH Network Corporation (NASDAQ:DISH)

Number of Hedge Fund Holders: 51

DISH Network Corporation (NASDAQ:DISH) is an American satellite television company. This September, Pivotal Research appreciated the efforts of DISH Network Corporation (NASDAQ:DISH) in deploying 5G networks to expand its reach. The firm lifted its price target on the stock to $65, with a Buy rating on the shares.

At the end of June 2021, 51 hedge funds tracked by Insider Monkey were bullish on DISH Network Corporation (NASDAQ:DISH), the same as in the previous quarter. The total value of these stakes is over $2.5 billion, up from $2.2 billion in the previous quarter. With nearly 19 million shares, Eagle Capital Management is the leading shareholder of DISH Network Corporation (NASDAQ:DISH).

ClearBridge Investments mentioned DISH Network Corporation (NASDAQ:DISH) in its Q2 2021 investor letter. Here is what the firm has to say:

“Portfolio holdings in the communication services and financials sectors also made strong contributions. Dish Network continues to make progress on the buildout of its greenfield 5G network, with Las Vegas slated to become the first market launched later this year. The company gained credibility, and its stock reacted favorably, after it announced a partnership with Amazon to deploy a 5G cloud-native network using AWS’s cloud infrastructure. While the stock has been volatile in recent quarters, we continue to feel confident in Dish’s long-term prospects, which include competing as a fourth U.S. wireless carrier. Charter Communications has been executing well and benefiting from the growth in residential broadband, which has been accelerated by COVID-19 and should see further support from the Biden Administration’s infrastructure bill, which earmarks $65 billion for broadband buildout. In addition, we expect the company to continue to grow its wireless business, leveraging its mobile virtual network operator (MVNO) relationship with Verizon. The company continues to generate strong and growing free cash flow and deploys it toward consistent and material share buybacks.”

6. ViacomCBS Inc. (NASDAQ:VIAC)

Number of Hedge Fund Holders: 71

ViacomCBS Inc. (NASDAQ:VIAC), an American mass media company, operates one of the four broadcast networks in the U.S. The company recently rebranded Paramount+, which will combine the content from Viacom, Paramount, and CBS, for the convenience of its subscribers.

On October 6, ViacomCBS Inc. (NASDAQ:VIAC) declared a quarterly dividend of $0.24 per share. The stock’s current dividend yield stands at 2.45%. The company’s dividend payout ratio stands at 22.86%. This August, Wells Fargo lifted its price target on ViacomCBS Inc. (NASDAQ:VIAC) to $65, while upgrading the stock to Overweight.

At the end of Q2, 71 hedge funds tracked by Insider Monkey reported having stakes in ViacomCBS Inc. (NASDAQ:VIAC).

5. Comcast Corporation (NASDAQ:CMCSA)

Number of Hedge Fund Holders: 84

Comcast Corporation (NASDAQ:CMCSA) is an American telecommunication and media company that operates the largest cable company in the U.S. and owns one of the biggest mass media companies, NBCUniversal. Comcast Corporation (NASDAQ:CMCSA) gained 6% in the past year.

Comcast Corporation (NASDAQ:CMCSA) has recently announced a new venture called Project UP to enhance digital equity. The project will combine the programs from Comcast, NBCUniversal, and Sky, and aims to reach 50 million people. Due to these advances, Comcast Corporation (NASDAQ:CMCSA) remains one of the best media stocks to buy now. This September, Pivotal Research raised its price target on Comcast Corporation (NASDAQ:CMCSA) to $75, with a Buy rating on the shares.

Of the 873 elite funds tracked by Insider Monkey, 84 hedge funds have positions in Comcast Corporation (NASDAQ:CMCSA) in Q2, compared with 88 in the previous quarter. The total value of these stakes is over $9.3 billion.

4. The Walt Disney Company (NYSE:DIS)

Number of Hedge Fund Holders: 112

The Walt Disney Company (NYSE:DIS) is one of the world’s leading providers of entertainment and media. The company bought Marvel Entertainment in 2009, in a deal worth $4 billion, which helped the company launch new shows on Disney+ based on Marvel characters. Along with this, The Walt Disney Company (NYSE:DIS) also operates other online streaming services such as Hulu and ESPN+.

At the end of Q2, 112 hedge funds tracked by Insider Monkey reported owning stakes in The Walt Disney Company (NYSE:DIS), down from 134 in the previous quarter. The total value of these stakes is over $10.8 billion.

Harding Loevner mentioned The Walt Disney Company (NYSE:DIS) in its Q4 2020 investor letter. Here is what the firm has to say:

“One of the original constituents of the Nifty Fifty holds a place in our portfolio today. When we bought Disney three years ago, we wrote that “we view Disney theme parks in the US, Europe, and China as resistant to online substitution.” We did not reckon on a pandemic, which closed all of them, and sent all of usto our couches. Disney, however, wasready for us, brilliantly illustrating the importance of management foresight and change management. Or, as Louis Pasteur said, “chance favors the prepared mind.

A century after its founding in 1923, Disney is in the middle of a bold shift from its legacy media networks & entertainment model—with cable TV, theme parks, and theater films dominating its earnings—to a direct-to-consumer streaming media model. The keys to Disney’s transition: matchless storytelling, coupled with financial strength. The company reliably creates content that people all over the world are eager to consume. It also hastened spending on original content to attract subscribers to its new streaming platform. These factors have allowed Disney to weather the pandemic having expanded its direct engagement with customers. Such connections yield a rich harvest of insights used to customize offerings on a mass scale, reinforcing that engagement in a virtuous circle and thereby raising the lifetime value of each customer. Subscribers to Disney+ reached 86.8 million one year after launch, compared to the 60 – 90 million management projected to reach in 2024. To be sure, Netflix, Apple, and Amazon remain formidable competitors in new-era streaming entertainment (mind what we said about everyone standing up at once), but there’s fight left in this old dog.”

3. Netflix, Inc. (NASDAQ:NFLX)

Number of Hedge Fund Holders: 113

Recently, Cowen appreciated the local production operations of Netflix, Inc. (NASDAQ:NFLX), combined with its global content distribution. The firm lifted its price target on Netflix, Inc. (NASDAQ:NFLX) to $750, with an Outperform rating on the shares.

At the end of Q2, 113 hedge funds tracked by Insider Monkey reported having stakes in Netflix, Inc. (NASDAQ:NFLX), up from 110 in the previous quarter. The total value of these stakes is over $13.2 billion.

Since the beginning of the year, Netflix, Inc. (NASDAQ:NFLX) delivered a 30% return to shareholders, while the stock gained 40% in the past year. In Q3, the company reported revenue of $7.4 billion, presenting a 16.1% growth from the prior-year quarter.

Ensemble Capital mentioned Netflix, Inc. (NASDAQ:NFLX) in its Q3 2021 investor letter. Here is what the firm has to say:

“Netflix stock had a disappointing first half of 2021 performance, treading water while the S&P 500 rallied, after a very strong 67% return in 2020. It benefited from the global pandemic in 2020, signing on 36.6 million new subscribers vs the typical 25 million or so it typically does. Total subscribers exceeded 200 million, up 22% over the previous year. However, in the first half of 2021, new subscriber additions slowed substantially, totaling only 5.5 million due to slower new content additions impacted by production delays, a resumption of outdoor activity as people everywhere adjusted to living with COVID, and the impact of a “pull-forward effect” on subscriber growth in last year’s very strong results. The third quarter saw new content velocity start to pick up, which is usually what drives new subscribers to the service, with expectations of an even stronger content slate going into the final quarter of the year, causing the stock to increase 15% in the quarter.”

2. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 138

Apple Inc. (NASDAQ:AAPL) released its online video streaming services, Apple TV+ in 2019 and has already reached over 40 million subscribers in 2021.

At the end of Q2, 138 hedge funds tracked by Insider Monkey were bullish on Apple Inc. (NASDAQ:AAPL), valued at $145.5 billion. In the previous quarter, 127 hedge funds had positions in the company, highlighting a positive hedge fund sentiment.

Recently, DA Davidson lifted its price target on Apple Inc. (NASDAQ:AAPL) to $175, with a Buy rating on the shares, highlighting the company’s strong business during the pandemic as the work from home policy spiked the laptop sales. In the past year, Apple Inc. (NASDAQ:AAPL) gained 33%.

ClearBridge Investments mentioned Apple Inc. (NASDAQ:AAPL) in its first-quarter 2021 investor letter. Here is what the firm has to say:

“As we actively manage holdings and position sizes, we look to regularly recycle capital into more compelling opportunities. Maintaining our valuation discipline, we sharply reduced our position in Apple, whose shares more than doubled following our initial purchase in mid-2019 with an earnings multiple rising from the low-to-mid teens to nearly 30x.”

1. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 271

Amazon.com, Inc. (NASDAQ:AMZN), an American multinational e-commerce and technology company, is quickly expanding its digital media streaming services through its major channel, Amazon Prime, which has gained over 153 million subscribers in the U.S.

Of the 873 elite hedge funds tracked by Insider Monkey, 271 hedge funds reported owning stakes in Amazon.com, Inc. (NASDAQ:AMZN), up from 243 in the previous quarter. The total value of these stakes is over $60.4 billion.

Recently, Baird lifted its price target on Amazon.com, Inc. (NASDAQ:AMZN) to $4,000, with an Outperform rating on the shares, appreciating the company’s technology infrastructure.

Polen Capital mentioned Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2021 investor letter. Here is what the firm has to say:

“Amazon has also lagged as its revenue growth is slowing on the very difficult comparisons from last year when this behemoth was growing revenue by over 40%. We still expect exceptional long-term growth and significant margin expansion as the fastest growing (and now large) segments of Amazon are also generating the highest margins.”

You can also take a look at 10 Biggest Companies Behind Upcoming Movies and TV Shows and 10 Best Telecom Stocks to Buy Right Now

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Disclosure. None. 10 Best Media Stocks To Buy Now is originally published on Insider Monkey.