The days of traditional pay-TV dominance are over. Social media and other digital publishers have arrived on the scene and established strong brands of their own, offering services that reach and appeal to customers who want selective access to content wherever and whenever via wireless network connectivity.
It’s a direct-to-consumer world we live in, and media giants need to consider how shifting industry trends are affecting the way content should be packaged and distributed to the end user.
Discussing the future of media, Pulitzer Prize-winning editor Marty Baron stated, “Today’s society is a mobile one, not simply a digital one.” He also went on to say, “People have been drawn to media outlets that only reaffirm their preexisting point of view and never challenge it.”
What the media companies are also quickly realizing is that they can no longer develop material just for the broader audience in an effort to hit viewer benchmarks. Now, they must also specialize the offering and intimately connect with individuals who have a specific set of interests, experience and ideas — creating a core of loyal followers in the process.
Just a few years ago, 91% of consumers in the U.S. said they would likely subscribe to cable services in the following year. When the study was conducted again one year later, the number had dropped significantly to just 79% . Not only do we feel the industry’s tectonic plates shift, but we’re continually measuring and analyzing the data that prove it.
As users’ desire for high-quality content that is unique to their tastes continues to grow, it’s a good time to check in with some of the more well-known players in the space to see how they are adapting to the new environment.
Using Profit Scanner, we’ll also determine whether investors are willing to boost shares as a vote of confidence in management at a time when the broader equity markets are reaching new all-time highs.
Let’s get started:
Media Stocks to Buy: CBS Corp. (CBS)
Click to Enlarge CBS Corporation (NYSE:CBS) is a mass media company with footprints in entertainment, cable networks, publishing and local broadcasting with the goal of creating and distributing industry-leading content across a variety of platforms to audiences around the world.
Under Leslie Moonves’ leadership, the CBS Television Network has captured the most viewers for 13 of the last 14 years, currently has television’s top drama, NCIS, one of television’s hottest comedy programs, The Big Bang Theory, and television’s most recognized news program, 60 Minutes.
These efforts have led to a steady and reliable stream of income for the company, but growth up and beyond has been challenging since the end of 2013. Regardless, investors have been cautiously optimistic — and shares have clawed their way higher as a result. Let’s take a look at the action in the charts.
Since June 30, there have been eight bullish event signals provided by Profit Scanner. With the closing price of $54.44 on the day of the first alert, investors who bought in now see those same shares trading for $57.47, a gain of 5.56% in just under two weeks. Resistance above can be found at $61.60, so there’s still some potential profit left on the table.
Media Stocks to Buy: Disney (DIS)
Click to Enlarge Walt Disney Co (NYSE:DIS) is mass media and entertainment operation that is behind some of the most respected and beloved brands around the globe, focusing on generating creative content, fostering innovation and utilizing the latest technology. It’s the company of Mickey Mouse, Winnie the Pooh and Snow White, etc.
Last year, the company of approximately 180,000 employees had top-line revenue of $52.46 billion, raking in $8.38 billion in net income as both of these key metrics rose to the satisfaction of investors.
But timing is everything, and these results were baked into the cake well in advance of the blowout numbers seen in 2015. Think about this: DIS was trading for about $16 back in early 2009 and has since rocketed to over $100 per share, although that is down from a peak of around $122 last year.
Is this a sign of troubling times ahead or simply a healthy pullback that conveniently took the broader equity market’s lead when it experienced a sharp decline last summer?
For answers, we turn once again to Profit Scanner. On July 8, we received several intermediate-term bullish event signals when the price of the stock closed at $99.62 per share.
Three bullish signals came in where price crossed above the 50-day moving average, 21-week moving average and a positive divergence in the MACD (weekly price period). Nearby resistance can be found at $103.99 above, with stiffer pushback at $120 per share.
Media Stocks to Buy: Twenty-First Century Fox (FOX)
Click to Enlarge Twenty-First Century Fox Inc (NASDAQ:FOX) is another multinational mass media corporation that focuses primarily on film and television. In 2013, the company formed as a result of a spinoff from Rupert Murdoch’s News Corporation operation.
As you may recall, the move occurred around the time when the company was battling with a series of scandals that had harmed the reputation of operations in the U.K. At the time, Mr. Murdoch justified the split stating that he believe it would unlock the true value of the separated entities for investors.
Let’s see how the stock is doing now.
FOX shares danced near $5 per share following the 2008 financial crisis, but has since rebounded, surpassing the all-time highs set during the peak of the dot-com era for a brief period in late 2014 before pulling back some. While the retracement has placed some downward pressure on FOX, there could be an opportunity to pick up shares at a discount, as the overall equity market is currently breaking above what was thought to be potent resistance above.
To find out more, we conducted a “Technical Event Lookup” search using Profit Scanner. On the intermediate-term outlook view, we had a bullish event known as the “Double Moving Average Crossover” (21-week 50-week) that alerted investors to establish positions at the closing price of $28 on July 8.
Short-term resistance above is at $29.65 per share, representing a 5.89% gain in two to six weeks, if realized, for those who bought in at the price provided in the initial buy alert.
Profit Scanner powered by Recognia can help traders of all levels uncover these signals to determine the best timing to buy. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.
