3 Streaming Stocks to Buy on the Netflix-Induced Dip
Streaming stocks gained massively during the pandemic due to stay-at-home and self-isolation mandates. However, certain industry issues are forcing investors to take a second look at these companies.
Disney (DIS): Disney is the world’s largest entertainment company. They are adapting to the rise in popularity of streaming by investing billions into Disney Plus.
Amazon (AMZN): Amazon Prime is used in more than 200 million homes worldwide; many people also use the service to stream movies and shows.
Warner Bros Discovery (WBD): In the first quarter of 2022, HBO and HBO Max had over 76.8 million subscribers, up 3 million from the last quarter and 12.8 million from a year ago.
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Netflix (NASDAQ:NFLX) lost 200,000 subscribers to start the year, and it’s showing in the stock price — shares cratered by more than 25% in response to the news. Millions were forced to stay home and make the most of streaming services when the pandemic swept. It led to massive interest in streaming companies and their stocks. With the latest news, streaming companies across the board are suffering; however, is this the time to buy the dip?
Here is where it gets complicated.
Many streaming companies are conglomerates. Netflix is one of the rare exceptions in the industry. It focuses primarily on streaming, which is why the company was hit hard with the downfall in subscribers.
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This article focuses on organizations that have a wide array of offerings. The idea is that the company’s other areas will be able to help balance it out if one section has more issues. An investment portfolio can be quite generic and become stale over time. However, building it up with a range of different assets means it is less likely to go under during tough times and evolves with the market.
Streaming Stocks to Buy: Disney (DIS)
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The Walt Disney Company is an American multinational media and entertainment conglomerate. It was founded on October 16, 1923, headquartered in Burbank, California. The company owns the ABC Television Network, its film studio, Disney Channel, Radio Disney and various other subsidiaries.
Disney is one of the most recognizable and iconic brands in the world. It has been transforming from a traditional media company to a company that taps into the power of technology and innovation to create experiences for its guests and fans.
As the world’s largest entertainment company, Disney could not turn a blind eye to the rising popularity of streaming services. In 2017, Disney was one of the first major companies to announce that it would pull its movies from Netflix and launch its streaming service in 2019.
The effort has been highly successful. Disney expects Disney Plus to have 230 million to 260 million paid subscribers by September 2024. And although Netflix subscribers felt a major drop in quarter one, Disney+ surpassed it with over 11 million new subscribers this last quarter.
Amazon (AMZN)
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Amazon is a multinational technology company that was originally founded in 1994. The company is based in Seattle, Washington, and has become the world’s largest online retailer. Amazon is also the world’s largest provider of cloud computing services and a major maker of consumer electronics.
Amazon Prime is becoming more popular. More than 200 million members worldwide streamed shows and movies as of 2021.
At the moment, AMZN stock finds itself in unfamiliar territory. It sank to a two-year low after reporting first-quarter earnings. Amazon reported a net loss of $3.84 billion in Q1 of this year. Last year, it made a record profit of $8.1 billion or $15.79 per share during the same quarter. Shares fell more than 10% in after-hours trading due to the news.
Overall, AMZN stock is down 25% in the year thus far. You cannot go wrong investing in this one as it gears up for a stock split.
Streaming Stocks to Buy: Warner Bros Discovery (WBD)
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It’s been a turbulent few years for AT&T (NYSE:T). Management could not manage the Time Warner merger, and the stock suffered. However, it has done some necessary housekeeping this year, and as a result, Warner Bros Discovery has emerged.
AT&T divested from Time Warner, and the entity merged with Discovery to form the new company. It can now concentrate on its 5G ambitions through this divestment, and the latest company can look to take on entertainment giants.
When HBO Max launched in 2020, it was touted as an exciting competitor to Netflix. With similar content to their competitors and bonus content like extended episodes and bonus footage from popular TV series, it quickly became a go-to choice for anyone looking for ways to stay entertained at home.
HBO Max has now hit over 76 million global subscribers and has been steadily climbing. The network has well over 3 million more international subscribers than the 73.8 million they reported last year.
In the first quarter of 2022, HBO and HBO Max reported more than 76.8 million subscribers — up 3 million from the last quarter and 12.8 million from a year ago.
On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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