“That’s fake news.” The phrase has become a rallying cry for the disaffected, and for those who perceive the mainstream media to be at odds with the truth. Indeed, the fake news claims are partly why businessman/reality TV star Donald Trump is now President Donald Trump. And whatever opinion you hold of the commander in chief, the fact is the fake news message does resonate with millions of Americans who have become distrustful of the mainstream media.
But what exactly is fake news, and what is corporate America doing to combat it?
That’s a question every American should be asking … doubly so if you’re an investor.
When I think of fake news, I think of media that’s biased to one political extreme or the other. Think of the difference between the right-wing pitch at Fox News and the leftist propaganda at MSNBC. But there’s far more to fake news than just opinion, and that has to do with the disinformation found in the many phony, false and manipulative stories populating social media. Then there’s the blogosphere, filled with political, social, even pseudo-scientific websites all designed to shape our thinking about a given subject.
To fight the fake news, many companies are actively engaged in trying to shut it down, or at least identifying and mitigating the worst offenders. And because I am a man who likes his news “on the real,” I applaud any company engaged in fighting fake news.
Yet because I also am an investor on the hunt for opportunity, I know that when it comes to opinion, you may not agree with a particular political viewpoint … but you can’t disagree that the narratives being pushed are winning eyeballs (and revenue) in the process.
Here are seven stocks to fight the fake news.
Fight the Fake News With … Alphabet (GOOGL)
In addition to being a profit juggernaut, Alphabet Inc (NASDAQ:GOOGL) — parent of search engine giant Google — also is one of the first lines of defense when it comes to fake news.
Google recently made an attempt to combat the circulation of fake news on its search engine, providing new tools that allow users to report misleading or offensive content.
Ben Gomes, vice president of engineering, said Google also “adjusted our signals to help surface more authoritative pages and demote low-quality content … so that issues similar to the Holocaust denial results that we saw back in December are less likely to appear.”
These moves are designed to improve results generated by Google’s cryptic-yet-ingenious search algorithm such that end users get the best, most honest experience.
Fight the Fake News With … Facebook (FB)
A lot of people get their news from social media these days, and there is no bigger (or more profitable) social media entity than Facebook Inc (NASDAQ:FB).
Facebook already has struck against fake news by using machine learning to take down fake accounts, limiting ad buys by more nefarious “news” sources and using third parties to help fact-check news, among other initiatives.
The social media platform has made another move of late, announcing last week that it rolling out “Related Articles” that will appear below news links to stories that are either garnering a lot of interest, or that Facebook suspects could be fake news (i.e., stories that have been externally fact checked by Facebook’s partners).
The “Related Articles” section will populate links to additional reporting on a given topic, which Facebook says is an attempt to provide different viewpoints.
Fight the Fake News With … Twitter (TWTR)
Fake news often comes to us in 140 characters or less, which means it comes to us via Twitter Inc (NYSE:TWTR).
Because anyone (including the president of the United States) can use Twitter to publish thoughts, the site is replete with fake, phony and misleading information. Twitter knows this, and that’s why it’s exploring adding a feature that would let users flag tweets that contain misleading, false or harmful information.
The company’s platform is ripe for rampant abuse, so any step in the direction of trying to rein in blatant lies and errors is a good step. Still, the nature of the beast is such that the task may be gargantuan.
Fight the Fake News With … New York Times (NYT)
My intellectual brother in arms — the late, great Christopher Hitchens — once said the following about “All the News That’s Fit to Print,” the New York Times Co (NYSE:NYT) motto:
“If I can still exclaim, under my breath, why do they insult me and what do they take me for and what the hell is it supposed to mean unless it’s as obviously complacent and conceited and censorious as it seems to be, then at least I know I still have a pulse.”
Hitchens was one of a kind, but his point should be well-understood.
The arrogance of the NYT notwithstanding, the publication and the parent company now seem to be the tip of the spear, piercing the Trump administration and its ties to the Russian meddling in the U.S. presidential election. That translates to eyeballs — the Times broke its quarterly online subscription record in Q1 of this year with 308,000 net sign-ups — and eyeballs translate into advertising dollars. That’s what I look at when evaluating any media stock.
Fight the Fake News With … Twenty-First Century Fox (FOXA)
Those on the left side of the political spectrum love to hate Fox News, which means they love to hate parent firm Twenty-First Century Fox Inc (NASDAQ:FOXA).
The company has had to circle the wagons in recent months due to the high-profile firings of top executives and on-air talent. Still, that doesn’t change the fact that Fox has an excellent news-gathering service and plays a crucial role in combating what many perceive to be the traditional, fake-news bias and elitist arrogance in the mainstream media.
In fact, that’s the kind of arrogance that Christopher Hitchens shunned until he took his final, pugnacious breath.
Fight the Fake News With … Comcast (CMCSA)
Comcast Corporation (NASDAQ:CMCSA) — the parent company and owner of NBC News and the MSNBC cable channel — has emerged to become the anti-Trump counterpoint.
NBC and MSNBC also boast well-funded news-gathering operations, but if you are right of center, you think they are the source of fake news. However, if you are someone who values news with an anti-establishment view, then the media properties held by CMCSA are what you want.
Judging by the cable news ratings, a lot of people are seeking the anti-establishment view.
In the second quarter, MSNBC finished first in the adults 18-49 demo during weekday prime time — the first time it has done so for a full quarter. And The Rachel Maddow Show, which topped all cable news shows for adults between age 25 and age 54, brought in a record 2.5 million viewers on average across Q2. These growing eyeballs mean growing advertising dollars … and likely a continued uptrend in CMCSA stock.
Fight the Fake News With … Salem Media Group (SALM)
I admit I’m biased on this one, as Salem Media Group Inc (NASDAQ:SALM) is the owner of Eagle Publishing, the company that publishes my Successful ETF Investing newsletter.
Still, if you are someone who thinks the genesis of the fake news phenomenon stems from the overwhelmingly biased editorial bent of the mainstream media, then you must look at SALM.
The company recently broadcast some 10 hours of radio talk show content directly from the White House, featuring many high-profile syndicated talk radio hosts that work under the Salem umbrella. Talk show luminaries Hugh Hewitt, Dennis Prager and Larry Elder were among those participating in the broadcasts — an event that’s part of the newfound salvo against conventional media thinking.
Jim Woods is the Editor-in-Chief of the Successful ETF Investing and Stock Investor’s Blueprint group of advisory services. As of this writing, he was long FB.