Traditional cable has been falling out of favor with the public over the past few years as more people turn to streaming options and choose to cut the cord.
The headwind has hit normal cable companies, as well as players like Walt Disney Co (DIS), whose ESPN is a source of concern for some investors.
While the shift in the media landscape will likely leave some firms out in the cold, there are some companies that appear to be well prepared for the end of traditional TV. They are catering to consumers’ changing tastes in a way many traditional television stocks are not.
Here are three stocks I think have this trend well in hand.
Cable-Disrupting Stocks to Buy: Netflix, Inc. (NFLX)
It would be impossible to talk about the death of traditional TV without including Netflix, Inc. (NFLX), arguably one of the major drivers of change in the media world.
NFLX was a market darling until the beginning of 2016, when investors began to question whether or not the company could continue delivering explosive growth.
NFLX is a good bet for investors who want to get on board the streaming revolution. While its most recent earnings report showed that subscriber numbers missed the mark, the firm’s position as one of the most popular streaming options is unlikely to be affected.
The company still sees itself adding 2 million international subscribers in the third quarter, and its growing library of original content gives it a strong foothold in the industry.
Cable-Disrupting Stocks to Buy: Twitter Inc (TWTR)
Social media micro-blogging site Twitter Inc (TWTR) may not come to mind as a company that will upset traditional cable, but the little blue bird has been building out a live-streaming function that could put it in a very good position as traditional TV dies out.
As a social media company, TWTR has been a turbulent ride for investors. Many questioned the site’s staying power against the likes of Facebook Inc (FB) and Instagram as active user numbers began to taper off.
However, TWTR is making a comeback in a big way with its live-streaming feature, something that many believe could become one of the most popular ways to view an event.
TWTR isn’t the only company working on a live-streaming function, but it has been extremely strategic with its partnerships. Twitter has already signed on to stream some NFL games this year, as well as the Republican and Democrat national conventions, and a recent deal with Bloomberg will allow the site to stream three of its programs.
Cable-Disrupting Stocks to Buy: Comcast Corporation (CMCSA)
Comcast Corporation (CMCSA), a cable provider, may be the last firm you think of when trying to mitigate your portfolio’s exposure to cord cutting — but the company is actually well positioned to transition into the next phase of TV watching.
First of all, CMCSA is securing its place in American living rooms by building a portfolio of exclusive content. Comcast acquired NBC Universal, and the company is likely to use that acquisition to peddle pay-per season/game/event sports packages.
Not only is Comcast prepared for the eventual death of traditional TV, but the firm will also benefit from the fact that people will be using the internet for viewing. As an internet service provider, CMCSA stock stands to gain from the trend away from traditional cable.
As of this writing, Laura Hoy was long NFLX.
