Buy Alert: 3 Media Stocks Destined for an Election Boost
The landscape for investing in media stocks has changed dramatically in recent years with significant entertainment company consolidations. Today, most of the major U.S. news channels belong to a handful of gargantuan corporate entities. This has resulted in two major outcomes for the journalistic tradition in the United States.
First, because many news companies fall within entertainment media conglomerates, they tend towards attracting viewers using opinion and sensation. Second, while this may result in lower quality, it does provide investors with a profit driven company to invest in. Thanks to the cultural relevance of the entertainment industry, investors can more easily observe performance in media ventures.
As the 2024 presidential election draws near for the U.S., these media conglomerates will be vying for viewership. This competition cycle tends to temporarily bolster media stocks, as their prices rise with the increased attention.
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Warner Bros Discovery (WBD)
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Born from the merger of Warner Brothers and Discovery, Warner Bros Discovery (NASDAQ:WBD) owns CNN, with 80 million households reached annually. As CNN’s popularity and mainstream appeal has waned since the 2020 election, WBD’s position among media stocks has seemed uncertain. Furthermore, the company’s CEO, David Zaslav has begun re-structuring much of WBD’s ventures in hopes of stabilizing company performance.
With changes in CNN management and an attempt to redefine the network as more centrally-opinionated, WBD shows promise for 2024. As the race for the presidency becomes ever more sensationalized, the network that attracts the most viewers will be most profitable.
2024 could prove even more fortunate for WBD, as the conglomerate owns Chilean broadcasting rights for the 2024 Paris Olympics. However, in both cases, WBD will need to shed the negative perception of its prior broadcasting ventures. If the company succeeds in a turnaround, investors should consider the solid coming catalysts for WBD stock price.
Paramount Global (PARA)
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With expansions in streaming services and sports broadcasting rights, Paramount Global (NASDAQ:PARA) has positioned itself for strong performance in 2024. The company also strategically combined its relatively new Paramount+ streaming service and Super Bowl broadcasting rights to organically market the platform. This combined with its relatively well-performing, mainstream news network, CBS, puts Paramount Global in a potentially lucrative position moving forward.
The company, however, has been entertaining mergers or even a private equity buyout. During mergers, it can be difficult to determine if a stock will benefit, but usually the target company’s stock rises. Moreover, the company currently partners with Comcast and uses its ownership of PlutoTV to increase Paramount+ access globally.
For the 2024 election, Paramount’s CBS network tends to market its 60 Minutes show as a beacon of truth. Whether or not this will work remains to be seen, but with the movement around PARA, the potential rises.
FOX Corporation (FOX)
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FOX Corporation (NASDAQ:FOX), the current parent company of Fox News, has seen significant turmoil since the 2020 election. Despite this, and whatever individual opinions on the company may be, it’s among media stocks that will certainly stick around. Much of this resilience comes from the fact that FOX remains ingrained in the minds of many American viewers as the definitive news source.
Such stability has allowed FOX to survive lawsuits, family drama, and the firing of one of its most viewed anchors. For investors, this underscores FOX’s safety during an election that all but guarantees viewer retention. Ultimately, Fox’s diverse portfolio and strong command of viewership puts it in a predictable buying category during an election cycle.
For investors, it’s important to take all factors of an opportunity into consideration, from ethicality to profitability. In the case of FOX, the business is strong, even if you don’t agree with the narrative.
On the date of publication, Viktor Zarev 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.
Viktor Zarev is a scientist, researcher, and writer specializing in explaining the complex world of technology stocks through dedication to accuracy and understanding.
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