When internet trolls attack, the best course of action is to not respond. This advice especially rings true the more powerful or influential you are; otherwise, by responding, you end up giving trolls an unwarranted platform. But as investors in news stocks found out this year, it’s hard not to counter when the trolling “strategy” comes from the very top.
No matter which political aisle you’re standing on, we can all agree that President Trump plays the media almost perfectly. By constantly lambasting journalists and media organizations as “fake news,” impacted networks are almost forced to punch back. But doing so funnels them into Trump’s arena of mano-a-mano street brawls, an avenue the President relishes.
The accusations of fake news are clearly wearing on high-level, left-leaning (and some right-leaning) journalists. They’re also having an impact on the markets. Generally speaking, news stocks are suffering from poor performances in 2017. Undoubtedly, investors are wishing they could turn back the clock.
But fake news also has a bright spot. With the Commander-in-Chief providing no shortage of material for media broadcasters and Twitter Inc (NYSE:TWTR), astute organizations have parlayed this dynamic to their advantage. As it turns out, trolling can backfire. In this case, President Trump may have given some news stocks a second chance at life.
Here are three “fake news” organizations that are bucking the trend!
Fake News Stocks: New York Times Co (NYT)
Among news stocks, none epitomizes the fiasco over fake news quite like New York Times Co (NYSE:NYT). Anybody that has listened to President Trump speak over the last two years can confirm he hates the media organization. Yet, as a Huffington Post editorial noted, the relationship could be a love-hate affair.
Either way, business has been good for NYT stock.
A month after Trump officially took office, I pegged this “fake news” company as a buy. Journalism today goes by a simple rule: If it bleeds, it leads. And what we have in the White House is a perpetual train wreck that surely would have derailed weaker personalities. But Trump is an unrivaled tour-de-force that keeps putting up unbelievable sound bites, which he even admits. In the long run, it’s an amazing tailwind for NYT stock.
Let’s be real: News stocks were never really interesting before then-real estate mogul Trump announced his presidential candidacy. No doubts exist that the fake news fanfare is a net positive for NYT stock. Year-to-date, shares are up a whopping 35%. While The New York Times may disagree with the White House on virtually every issue, they can’t deny the impact.
Fake news gives NYT stock at least three more years of juicy, perhaps scandalous material.
Fake News Stocks: News Corp (NWS)
Since spinning off from Rupert Murdoch’s original media empire, News Corp (NASDAQ:NWS) hasn’t enjoyed much success in the markets. From its “reintroduction” in June 2013, NWS stock is down nearly 12%. This doesn’t come as much of a surprise. The other spinoff entity is Twenty-First Century Fox Inc (NASDAQ:FOXA). Between the two news stocks, most people would rather have FOXA, despite it having serious challenges.
Before Trump, NWS stock couldn’t gain traction. Between January 2014 through the end of 2016, shares were locked in a decisive downtrend. But this year has been a turning point for News Corp. On a YTD basis, shares are up over 18%. Under ordinary circumstances, such a solid-but-not-necessarily-remarkable performance wouldn’t generate much noise. But this is scheduled to be the first time that NWS returns a full-year profit for shareholders.
And what changed the company’s luck? Fake news, of course!
Spinoff rival 21st Century Fox focuses on media content and entertainment. NWS stock, on the other hand, is levered towards the publication side of the business: boring! Yet with constant presidential drama and News Corp’s international audience, NWS has a wealth of information to exploit.
It’s not the intended effect that Trump had in mind, but I’m sure investors will take what they can get.
Fake News Stocks: tronc Inc (TRNC)
Be careful what you wish for because you just might get it. We’ve all heard this expression before, and news stocks should consider Donald Trump’s election victory a blessing in disguise. If former Secretary of State Hillary Clinton ascended to the executive office, what would news organizations discuss? Specifically, I’m not sure if tronc Inc (NASDAQ:TRNC) would enjoy its recent rally.
You don’t have to be a rocket scientist to figure out that traditional news organizations are dying. My local paper, The San Diego Union-Tribune, runs frequent advertisements and marketing campaigns to attract subscribers. Results are mixed. It just so happens that the Union-Tribune is one of several newspapers, including the Los Angeles Times, under TRNC stock.
I’m not here to paint a rosy picture of the newspaper industry. The sector has severe obstacles to overcome, and no ready-made solutions are available. Still, the troubles for TRNC stock would be a lot worse without President Trump.
Under his administration, tronc Inc has a treasure trove of material to use. If no news exists, then Trump would (gladly) generate it. At the very worst, media firms can publish editorials explaining why they’re not fake news. Essentially, any content that’s remotely related to the President would likely receive strong coverage (including this one).
In an administration feeding sound bites, TRNC stock is an investment you shouldn’t ignore.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.
