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4 Media Stocks That Will Win BIG on Fake News Accusations

Media stocks had nowhere to go until fake news and "The Donald" arrived

fake news - 4 Media Stocks That Will Win BIG on Fake News Accusations

Source: Flash.pro via Flickr (modified)

It seems like not a day goes by without some accusation by President Donald Trump that the mainstream media is fake news. Not surprisingly, the charges of fake news are often associated with reports unfavorable to his administration. We also shouldn’t be surprised with Trump’s candid rhetoric. Throughout his campaign, the then-presidential candidate waged a war against the media, and indirectly, media stocks.

4 Media Stocks That Will Win BIG on Fake News Accusations

Back then, the conflict could be termed in the usual political backdrop of right versus left, Republicans versus Democrats. Such divisiveness will always be present in every political cycle.

Indeed, it would be utterly bizarre if we didn’t see the back-and-forth. But with Donald Trump levering the fake news card, he is taking it to an unprecedented level. Previous administrations have criticized the press, but Trump is attacking journalism altogether.

This isn’t just an issue for investors of media stocks. No matter where you stand on the political spectrum, the freedom of the press is a vital concern. Because Donald Trump is now the world’s most powerful man, his words naturally have more clout. By taking every opportunity to label genuine criticisms of the present administration as fake news, this only obfuscates from the real issue. Incidentally, this only furthers the political divide by caving in to base tribalism.

Most of the time, fake news is considered detrimental to media stocks. However, I take a contrarian approach to this situation. Call me cynical but deep down, executives of media stocks are loving “The Donald” turned President of the United States. In addition, the fake news accusations have been a godsend for a largely decrepit industry.

Let’s be real — CNN hasn’t been this interesting since perhaps ever! Every day is a major breaking news item. You never know what whoppers are going to leave “The Donald’s” mouth. The best part of the madness is Trump’s apparent friendship with conspiracy theorist Alex Jones. I thought that might be the end of the now President’s campaign run. Instead, Alex Jones and his InfoWars team are vying for White House press credentials.

Folks, you couldn’t make this stuff up if you tried. To a paraphrase a philosophical aphorism, if the truth is reported, but no one is there to read it, is it really news? As terrible as it sounds, fake news is better than boring news. Here are the four media stocks that will rise on this latest craze!

Media Stocks to Buy: New York Times Co (NYT)

Media Stocks to Buy: New York Times Co (NYT)
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Source: Source: JYE Financial, unless otherwise indicated

From the beginning, NYT and The Donald have been at each other’s throats. This bout is Mayweather versus Pacquiao, but without all the ducking and the awfulness of anticlimax.

Give me Trump versus the NYT all day long!

One would think, though, that the constant barrage of insults from the absolute top of the ticket would be a net negative for NYT. Media stocks make their living on reporting the news. Being labeled as a fake news organization in any other circumstance in any other time would be a death sentence. These are not normal circumstances, nor is this like any other time. The gloves are off, and the people are watching.

And that really is the bullish argument for NYT. Did NYT stock collapse when Trump took the White House? No, quite the opposite! From Nov. 8 to the end of 2016, shares jumped nearly 19%. For this year, NYT has already booked more than 8.6% despite slipping badly since mid-February. By the way, at this time last year, the Times was down 3%.

NYT stock is loving fake news. Don’t let anyone tell you otherwise!

Media Stocks to Buy: CBS Corporation (CBS)

Media Stocks to Buy: CBS Corporation (CBS)
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Source: Source: JYE Financial, unless otherwise indicated

He openly complained about bias, and accused the moderators of throwing softball questions to his rival Hillary Clinton. And I’m telling you, that was media gold for companies like CBS.

Sure, publicly they complain. Privately, CBS is hoping for another fake news outburst — and they’ll get it!

The issue with CBS and other media stocks is that apparently, nothing fazes or will ever faze Donald J. Trump. People thought that Charlie Sheen was winning in relation to his insane antics. He doesn’t even come close to Trump. In fact, “The Donald” is so good that he turned a Super Bowl blowout to the greatest comeback of all time. Efforts to rip him at the Oscars led to their biggest public embarrassment of all time.

The Donald also saved CBS stock from falling into obscurity. Last year, between the beginning of April to the start of September, CBS dropped more than 5% in the markets. This was in sharp contrast to its amazing rally from earlier in 2016. But then Trump stepped in. First, there were the controversies, then the debates. And when the unthinkable happened, CBS soared to the moon.

Surely, they will not admit it, so I’ll say it for them. Fake news has been awesome for CBS and media stocks.

Media Stocks to Buy: News Corp (NWSA)

Media Stocks to Buy: News Corp (NWSA)
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Source: Source: JYE Financial, unless otherwise indicated

Look, NWSA has 24,000 employees. Its content distribution portfolio includes renowned names such as The Wall Street Journal, Factiva, Barrons and Dow Jones Newswires.

NWSA also owns a number of international media outlets. As far as I’m concerned, they’re the king of news media. They’re also incredibly irrelevant in the world of Donald Trump.

When Trump won the general election, I’m now convinced that the rotational axis of the earth became intractably misaligned. We no longer live in reality. Fake news is now our true platform. The quicker NWSA and other media stocks embrace this, the better they will be. Because here’s the thing: Someone who believes in wild conspiracy theories like the Sandy Hook tragedy being a hoax will likely have press credentials!

At that point, there is no point.

NWSA should really consider my fake news proposal. At the very least, they should attempt to earn the ire of The Donald. The proof is in the pudding. NWSA was among the worst performers of media stocks. But when Donald Trump became President-elect, things starting looking up for them. Year-to-date, NWSA stock is up nearly 12%. That’s a perfect reversal from the nearly 12% loss they incurred in 2016.

The results are undeniable. NWSA should just cave in and embrace fake news.

Media Stocks to Buy: Twenty-First Century Fox Inc (FOX)

Media Stocks to Buy: Twenty-First Century Fox Inc (FOX)
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Source: Source: JYE Financial, unless otherwise indicated

But he also has his favorite trio of news outlets, something the liberals probably call the “Axis of Fake News.” These are, in no particular order, InfoWars, Breitbart and Twenty-First Century Fox Inc (NASDAQ:FOXA, NASDAQ:FOX), which owns Fox News.

Fox News, and indirectly FOX stock, is having an identity crisis. This makes for compelling drama, and will keep people tuned in. As a conservative outlet, FOX will have to reconcile the irreconcilable. First, there’s Russia. Beloved (by many Republicans) President Ronald Reagan, once said, “Mr. Gorbachev, tear down this wall!” The Donald’s message is “Mr. Putin, wouldn’t it be great if we were friends?”

The other issue is our Middle Eastern policy. FOX anchor and Trump disciple Sean Hannity made a career of supporting then-President George W. Bush’s invasion of Iraq. Oops! Donald Trump opposed the war in Iraq, or something like that. The point of the matter is that Trump has said it, and so it is. The only problem is that it contradicts the long standing position of FOX.

But this is the beauty of fake news — nobody cares. It’s the sizzle, not the steak that sells. And as long as they sizzle — and they’re sort of forced to — FOX stock has a bright future.

As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/02/4-media-stocks-win-big-fake-news-nyt-cbs-nws-fox/.

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