In this article, we will take a look at the 5 best streaming stocks to buy now. For a detailed analysis of these companies, go directly to the 10 Best Streaming Stocks to Buy Now.
5. Roku, Inc. (NASDAQ: ROKU)
Number of Hedge Fund Holders: 60
Total Value of Hedge Fund Holdings: $3.23 Billion
Ranking 5th in our list of the 10 best streaming stocks to buy now is digital media manufacturer Roku, Inc (NASDAQ:ROKU). California-based Roku, Inc has over 51.2 million active users. Last month the company purchased Nielsen Holdings PLC (NYSE:NLSN) and integrated Nielsen’s advertisements and material measurement items into the Roku platform.
Roku, Inc (NASDAQ:ROKU) has a market cap of $41.0 billion and total net revenue of $319 million in 2020. On April 29, Wedbush analyst Michael Pachter upgraded Roku Inc. from Neutral to Outperform. Shares of ROKU gained 169% over the past twelve months.
There were 60 hedge funds that reported owning stakes in Roku, Inc. at the end of the fourth quarter, up from 59 funds a quarter earlier. The total value of these stakes at the end of Q4 is $3.23 billion.
RGA Investment Advisors mentioned that ROKU has been either the primary or second-largest generator of their portfolio success in its Q4 2020 investor letter:
“For two years running, Roku has now been either the largest or second-largest driver of performance in portfolios. When we purchased Roku, obviously we never expected such a phenomenal outcome, so quickly—these things can only be chalked up to luck. However, we do think luck is the residue of design and Roku had all the hallmarks ex ante as the kind of position that could do something wildly spectacular. One of the first signs in seeing Roku’s potential was the sharp contrast between our modeled expectations for the top line of the business and where the consensus expectations were. This was the Shopify set up all over again. By this time, we had added an additional tool to our analytical framework, and this helped further enforce our conviction that not only was it we who were right about where things should go, but also that the very existence of this gap could be a potent source of fuel behind the stock as the world came around to our expectation. Specifically, we had become increasingly comfortable building lifetime value analyses of companies, and notably, when we bought Roku, we were quite confident that with only modest annual increases in average revenue per user (ARPU), and a 5-year average customer lifespan, we were buying the company for its existing customer base and nothing more. In other words, the growth at Roku was entirely free at the prevailing prices we bought into.
4. Peloton Interactive, Inc. (NASDAQ: PTON)
Number of Hedge Fund Holders: 63
Total Value of Hedge Fund Holdings: $5.66 Billion
New York-based exercise equipment and media company Peloton Interactive, Inc. (NASDAQ:PTON) ranks 4th in our list of the 10 best streaming stocks to buy now. The company was founded in 2012 and was funded by a kickstart campaign in 2013. The company has over 1.09 million fitness subscribers and 3.1 million members in total. Peloton Interactive, Inc. has a market cap of $28.2 billion. The company’s total revenue in 2020 came in at $607.1 million. Shares of PTON increased 182% over the past twelve months. In April, B of A Securities maintained a Buy in PTON but lowered the price target to $150.
Peloton has a subscription service in which it streams live and recorded workouts for its customers.
There were 63 hedge funds that reported owning stakes in Peloton Interactive, Inc. at the end of the fourth quarter, up from 58 funds a quarter earlier. The total value of these stakes at the end of Q4 is $5.66 billion.
Carillon Tower Advisers mentioned that PTON continues to benefit from its dominant role in the secular movement toward at-home linked health, which has sent its stock higher during the pandemic in its Q4 2020 investor letter:
“Peloton Interactive operates a connected fitness platform offering live and on-demand classes allowing users to exercise at home. The firm continues to take advantage of its strong position in the secular trend toward at-home connected fitness, which has led its shares higher throughout the pandemic. More recently, the company announced its intentions to acquire a global fitness equipment provider which should assist Peloton in its ongoing efforts to expand manufacturing capacity to keep pace with the robust demand for its products.”
Courtesy of Peloton
3. Comcast Corporation (NASDAQ: CMCSA)
Number of Hedge Fund Holders: 84
Total Value of Hedge Fund Holdings: $8.83 Billion
Ranking 3rd in our list of 10 best streaming stocks to buy now is telecommunications company Comcast Corporation (NASDAQ:CMCSA). The Pennsylvania-based technology and entertainment company provides streaming services through Xfinity Stream with over 19.85 million subscribers.
Comcast Corporation (NASDAQ:CMCSA) has a market cap of $259.8 billion. In 2020, Comcast’s revenue came in at $103.5 billion. Shares of CMCSA rose 56% over the past twelve months. In April, Raymond James boosted Comcast from Market Perform to Outperform with a $61 price target.
There were 84 hedge funds that reported owning stakes in Comcast Corporation (NASDAQ:CMCSA) at the end of the fourth quarter, up from 82 funds a quarter earlier. The total value of these stakes at the end of Q4 is $8.83 billion.
Cooper Investors mentioned that the future for CMCSA’s NBCU and Sky’s media content properties has become somewhat unpredictable, although it remains a core area of management priority and resource allocation in its Q4 2020 investor letter:
“During the quarter the portfolio exited its position in Comcast, a long term holding having been in the portfolio since 2013. We were attracted to Comcast’s high quality cable assets which we view as a unique communication infrastructure that continues to perform well as it serves the persistent demand for high speed broadband. However, the outlook for their media and content assets in NBCU and Sky has become increasingly uncertain while remaining a key area of management focus and capital allocation. This clouded view on industry trends led us to seek more attractive investment propositions elsewhere.”
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2. Netflix, Inc. (NASDAQ: NFLX)
Number of Hedge Fund Holders: 116
Total Value of Hedge Fund Holdings: $15.6 Billion
Ranking 2nd in our list of 10 best streaming stocks to buy now is Netflix, Inc. (NASDAQ:NFLX). The Delaware-based content platform and production company Netflix, Inc. was founded in 1997 and has grown its user base to over 207.64 million paying subscribers.
Netflix, Inc. (NASDAQ:NFLX) has a market cap of $225.7 billion. Netflix, Inc’s revenue in 2020 came in at $2.76 billion. Shares of NFLX jumped 18% over the past twelve months. In April, Cowen analyst John Blackledge retained an Outperform ranking in NFLX and lowered the price target to $650.00.
There were 116 hedge funds that reported owning stakes in Netflix, Inc. at the end of the fourth quarter. The total value of these stakes at the end of Q4 is $15.6 billion.
Our calculations show that Netflix, Inc. (NASDAQ: NFLX) ranks 14th in our list of the 30 Most Popular Stocks Among Hedge Funds.
Miller Value Partners, in their Q4 2020 Investor Letter, said Netflix, Inc. (NASDAQ: NFLX) was added in their portfolio in the fourth quarter of 2020. Here is what Miller Value Partners has to say about Netflix, Inc. in their letter:
“Lastly, we added a small position to Netflix after the disappointment following 3Q results. Overall, it’s getting more difficult to find investment opportunities in the very high growth areas that meet our standards for attractive value. On the other hand, we continue to find opportunities in more value-oriented areas of the market. We would expect the portfolio to migrate in this direction.”
1. The Walt Disney Company (NYSE: DIS)
Number of Hedge Fund Holders: 144
Total Value of Hedge Fund Holdings: $16.4 Billion
Topping the 10 best streaming stocks to buy now is The Walt Disney Company (NYSE:DIS). The California-based multinational mass media and entertainment company operates its streaming services through Disney+. Disney+ has over 100 million paying subscribers across 59 countries. The company expects its user base to grow to 230-260 million by 2024. The company recently announced a partnership with Vi, an Indian mobile operator to provide complementary content to their subscribers such as live sports.
The Walt Disney Company has a market cap of $336.7 billion. The Walt Disney Company’s total revenue came in at $65.39 billion in 2020. Shares of DIS surged 79% over the last twelve days. On April 20, Wells Fargo Maintained an Overweight rating on DIS and raised the price target to $219.
There were 144 hedge funds that reported owning stakes in The Walt Disney Company at the end of the fourth quarter. The total value of these stakes at the end of Q4 is $16.4 million.
Based on our calculations, The Walt Disney Company (NYSE: DIS) ranks 11th in our list of the 30 Most Popular Stocks Among Hedge Funds.
Hardin Loevner mentioned that DIS is transitioning from the traditional television networks and entertainment model, which relied heavily on cable TV, theme parks, and theatre films, to a direct-to-consumer digital media model in its Q4 2020 investor letter:
“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 us to our couches. Disney, however, was ready 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.”
You can also take a peek at 10 Best Travel Stocks to Buy Right Now, and 10 Best Automotive Stocks to Invest in Now.
