In this article, we discuss the 5 best communication stocks to invest in. If you want to read our detailed analysis of these stocks, go directly to the 11 Best Communication Stocks To Invest In.
5. ViacomCBS Inc. (NASDAQ:VIAC)
Number of Hedge Fund Holders: 64
ViacomCBS Inc. (NASDAQ:VIAC) is one of the biggest media and entertainment firms in the world. It has stepped up investments in the streaming industry in recent years and streaming now accounts for more than half of the total valuation of ViacomCBS Inc. (NASDAQ:VIAC). Macquarie analyst Tim Nollen has a Neutral rating on ViacomCBS Inc. (NASDAQ:VIAC) stock with a price target of $32.
ViacomCBS Inc. (NASDAQ:VIAC) has an impressive legacy business. It owns 29 broadcast stations, several news magazines and film studios, and offers cable subscription services. 64 hedge funds in the database of Insider Monkey were long ViacomCBS Inc. (NASDAQ:VIAC) at the end of third quarter of 2021 with stakes worth $1.2 billion in the firm.
4. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 66
Barclays analyst Kannan Venkateshwar recently upgraded AT&T Inc. (NYSE:T) stock to Overweight from Equal Weight with a price target of $30, noting that telecom companies in the US were better positioned than cable firms due to take advantage of wireless trends in 2022. AT&T Inc. (NYSE:T) is increasing spend towards the rollout of 5G services along with Verizon as more devices capable of supporting 5G launch in the US.
At the end of the third quarter of 2021, 66 hedge funds in the database of Insider Monkey held stakes worth $3.2 billion in AT&T Inc. (NYSE:T), compared to 68 in the previous quarter worth $2.8 billion.
In its Q1 2021 investor letter, Nelson Capital Management, an asset management firm, highlighted a few stocks and AT&T Inc. (NYSE:T) was one of them. Here is what the fund said:
“Nelson Capital stayed busy in the first quarter, making several adjustments within our core portfolio. In the communication services sector, we sold AT&T (tkr: T). Over the years, AT&T has made several poor acquisitions, especially in the content realm, leaving the company saddled with debt and unable to change directions.”
3. Charter Communications, Inc. (NASDAQ:CHTR)
Number of Hedge Fund Holders: 74
Charter Communications, Inc. (NASDAQ:CHTR) operates as a broadband connectivity firm. It has expanded in the internet and mobile markets recently, growing revenue in the two areas by 14% and 65% in the first three quarters of 2021. Charter Communications, Inc. (NASDAQ:CHTR) serves over 31 million customers and the rollout of 5G could increase this number significantly in the coming months.
Charter Communications, Inc. (NASDAQ:CHTR) smashed market estimates on earnings per share and revenue for the third quarter by $0.75 and $190 million, respectively. Analysts expect free cash flow margins of Charter Communications, Inc. (NASDAQ:CHTR) to increase in the coming months as the management finds more ways of self-installation of services.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Charter Communications, Inc. (NASDAQ:CHTR) was one of them. Here is what the fund said:
“The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included communication services, where Charter trailed after generating robust returns earlier in the recovery.”
2. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 75
Comcast Corporation (NASDAQ:CMCSA) is a media and technology firm. Pivotal Research analyst Jeffrey Wlodarczak has a Buy rating on Comcast Corporation (NASDAQ:CMCSA) stock with a price target of $62. The shares are trading relatively cheap when viewed in context of industry-leading margins, share buybacks, and strong operating performance of Comcast Corporation (NASDAQ:CMCSA). The firm also has an impressive dividend history with 13 years of consecutive payouts that have been increasing for the past four years.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Eagle Capital Management is a leading shareholder in Comcast Corporation (NASDAQ:CMCSA) with 28 million shares worth more than $1.6 billion.
In its Q1 2021 investor letter, Nelson Capital Management, an asset management firm, highlighted a few stocks and Comcast Corporation (NASDAQ:CMCSA) was one of them. Here is what the fund said:
“Comcast is the Largest cable provider in the U.S. and is the dominant internet access provider in the markets it serves. Though Comcast will likely see further declines in cable subscriptions due to ongoing cord-cutting, it should be able to off set that lost revenue by growing internet access customers and instituting higher pricing. The pandemic has increased the importance of a fast internet connection, with more content streaming to homes at increasingly higher quality. Comcast made significant upgrades early on, allowing it to quickly deploy new technology and increase speeds to meet the evolving needs of its customers.”
1. T-Mobile US, Inc. (NASDAQ:TMUS)
Number of Hedge Fund Holders: 89
2022 is expected to be a breakthrough year for T-Mobile US, Inc. (NASDAQ:TMUS) with regards to 5G rollout. Analysts expect T-Mobile US, Inc. (NASDAQ:TMUS) to be the industry leader in the US with respect to 5G coverage after the merger with Sprint. A drop in share price over the past few months offers a compelling opportunity for investors to take advantage of the 5G boom. Hedge funds seem bullish on T-Mobile US, Inc. (NASDAQ:TMUS) stock as well.
Greenwich-based investment firm Viking Global is a leading shareholder in T-Mobile US, Inc. (NASDAQ:TMUS) with 10 million shares worth more than $1.3 billion.
On December 16, JPMorgan named T-Mobile US, Inc. (NASDAQ:TMUS) among the best long-term ideas due to “operating efficiencies and substantial synergy” that were expected to drive strong cash flow growth for the firm in the coming years. The advisory highlighted the growth opportunities for T-Mobile US, Inc. (NASDAQ:TMUS) in the fixed wireless market as well. JPMorgan has an Overweight rating and a $175 price target on the stock.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and T-Mobile US, Inc. (NASDAQ:TMUS) was one of them. Here is what the fund said:
“The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included communication services, where T-Mobile trailed after generating robust returns earlier in the recovery.”
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