In this article, we will take a look at the 5 best entertainment stocks to buy for 2024. To read our analysis of the recent trends, and market activity, you can go to the 12 Best Entertainment Stocks to Buy for 2024.
5. Endeavor Group Holdings, Inc. (NYSE:EDR)
Number of Hedge Fund Holders: 46
Beverly Hills, California-based Endeavor Group Holdings, Inc. (NYSE:EDR) is a global sports and entertainment company specializing in talent representation, sports operations & advisory, event & experiences management, media production & distribution, experiential marketing, and brand licensing.
On October 25, Endeavor Group Holdings, Inc. (NYSE:EDR) announced the initiation of a formal review to evaluate strategic alternatives for the Company. On February 22, Deutsche Bank lowered the price target for Endeavor Group Holdings, Inc. (NYSE:EDR) shares to $32 from $35 and maintained a ‘Buy’ rating. The firm believes that an announcement of a bid from Silver Lake to take the company private will come soon.
Hedge funds are bullish about Endeavor Group Holdings, Inc. (NYSE:EDR) shares as the number of hedge funds that own its shares has increased from 32 in Q1 2022 to 46 in Q4 2023. These hedge funds together held shares worth $3.5 billion according to Insider Monkey data.
4. The Liberty SiriusXM Group (NASDAQ:LSXMK)
Number of Hedge Fund Holders: 48
The Liberty SiriusXM Group (NASDAQ:LSXMA) comprises Liberty Media’s ownership in SiriusXM Holdings Inc. (NASDAQ:SIRI). Liberty Media owns 83.5% of SiriusXM which operates two audio entertainment businesses, SiriusXM and Pandora.
On December 12, Liberty Media announced definitive agreements whereby Liberty Media’s Liberty SiriusXM tracking stock group will be combined with SiriusXM with the new company having a single outstanding series of common stock.
As of Q4 2023, 43 of the 933 prominent hedge funds tracked by Insider Monkey held shares of The Liberty SiriusXM Group (NASDAQ:LSXMA), worth $2.0 billion. Warren Buffett’s Berkshire Hathaway owned 43.2 million shares of the company valued at $1.2 billion.
3. Warner Bros. Discovery, Inc. (NASDAQ:WBD)
Number of Hedge Fund Holders: 56
New York City-based Warner Bros. Discovery, Inc. (NASDAQ:WBD) is a global media and entertainment company. It was formed in April 2022 through the merger of WarnerMedia’s merger with Discovery which combines premium entertainment, sports and news assets with leading non-fiction and international entertainment and sports businesses.
On February 23, Warner Bros. Discovery, Inc. (NASDAQ:WBD) released its financial results for Q4 2023 which failed to meet the consensus estimates for EPS and revenue. The company generated a revenue of $10.3 billion and a normalized EPS of -$0.13, which missed expectations by $0.12.
In its Q3 2023 “Partners Fund” investor letter, Longleaf Partners, managed by Southeastern Asset Management, made the following comments about Warner Bros. Discovery, Inc. (NASDAQ:WBD):
“Media conglomerate Warner Bros Discovery (WBD) declined in the quarter with a combination of the writers’ and actors’ strikes headlines, and a fight between Charter and Disney that led to more concerns about the linear and streaming profit structure. Although both situations actually improved as the quarter went on, both created uncertainty that weighed heavily on the WBD stock price in the near term. The underlying business is executing better, with solid free cash flow generation reported in the quarter that should continue for the foreseeable future. The competitive landscape is getting brighter with multiple streamers taking price increases. WBD is in the hands of a strong management team and board that are focused on creating long-term value for shareholders.”
2. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 89
Based in Burbank, California, Walt Disney Company (NYSE:DIS) is a worldwide entertainment company. It operates multiple resort destinations; a cruise line; a beach resort; vacation ownership program; and guided tour adventure businesses. It is home to entertainment brands such as ESPN, Disney+, Hulu, Marvel Studios, and National Geographic, among others.
On February 7, The Walt Disney Company (NYSE:DIS) released its financial results for the quarter ended December 30, 2023. Its revenue remained nearly constant y-o-y at $23.5 billion while net income increased by 58% y-o-y to $2.2 billion.
Simultaneous to the earnings release, the Board of Directors of The Walt Disney Company (NYSE:DIS) approved a new share repurchase program targeting $3 billion in repurchases during the fiscal year. The Board also declared a cash dividend of $0.45 per share, representing an increase of 50% versus the last dividend.
1. Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 89
Netflix, Inc. (NASDAQ: NFLX) is a leading provider of streaming entertainment services based in Los Gatos, California. It boasts more than 260 million paid memberships across more than 190 countries and offers a film and television series library through distribution deals as well as its own productions.
On January 23, Netflix, Inc. (NASDAQ:NFLX) released its financial results for Q4 2023. The company posted a revenue of $8.8 billion, which represents nearly 12% y-o-y growth, and a net income of $938 million. It also added 13.1 million new paid members to its platform during the quarter, which represents nearly 13% growth.
Netflix, Inc. (NASDAQ:NFLX) is also making efforts to return capital to its shareholders through share repurchases. During the quarter, it repurchased nearly $2.5 billion worth of its shares and had $8.4 billion remaining under its buyback authorization.
Polen Capital, an investment management company, made the following comments about Netflix, Inc. (NASDAQ:NFLX), in its “Polen Focus Growth Strategy” fourth quarter 2023 investor letter:
“Netflix has made meaningful progress on monetizing shared passwords and laying the foundation for consumer choice, although the ramp in advertising tier subscribers remains in the beginning stages. The low-hanging fruit may already have been picked on password sharing efforts, but our research shows there should be long tails of revenue and free cash flow growth. In our opinion, Netflix remains the most advantaged and profitable streaming service with opportunities to continue adding subscribers and raising prices as it demonstrates more value to consumers over time. Over the longer term, we also expect significant advertising revenue.”
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