Takeover talk has been in the air recently, as a report surfaced indicating that Walt Disney Co (NYSE:DIS) was considering making a bid for the majority of Twenty-First Century Fox (NASDAQ:FOX, NASDAQ:FOXA). Don’t fall over in amazement just yet, though — Fox News and its affiliates were not expected to be part of the deal. Instead, DIS was focused on the movie studio and entertainment division before the deal died.
The potential deal had made sense because the combination of the two media giants would lead to an increased amount of content ownership. Someone once said that content is king, and even in the world of streaming services, that old adage remains true.
While I would never recommend a stock as a direct result of its takeover potential — high odds of being bought out is simply a bonus when a stock already meets all my criteria — the recent rumors got me thinking about other media companies that could be good acquisition candidates.
Three stood out when I ran my screens, so let’s take a look at each now:
Media Stocks Ripe for a Buyout: Netflix (NFLX)
Netflix, Inc.’s (NASDAQ:NFLX) market capitalization of $84.5 billion limits the pool of companies with enough cash to buy it out, but there’s no question it has a lot to offer to a potential parent company.
There is one name in particular that is sitting on a hoard of cash and could benefit greatly from the takeover: Apple Inc. (NASDAQ:AAPL). Purchasing NFLX would give AAPL instant access to the future of TV, and it would also keep Amazon.com, Inc. (NASDAQ:AMZN) at bay as it continues to grow its streaming services.
At the same time, though, AMZN could also be a possible suitor for Netflix.
Media Stocks Ripe for a Buyout: AMC Networks (AMCX)
AMC Networks Inc (NASDAQ:AMCX) has a $3 billion market capitalization and is the owner of several well-known and top-rated cable networks, including AMC, WE tv, BBC America, IFC and SundanceTV.
This acquisition all comes down to content, as the programs aired on each of these channels are very unique.
AMCX is a strong takeover candidate as a result of that, as well as the fact that it can be bought on the cheap with the stock trading near multiyear lows.
Media Stocks Ripe for a Buyout: Match Group (MTCH)
Match Group Inc (NASDAQ:MTCH) pioneered the online dating industry when it launched Match.com in 1995 — we’ve all seen commercials for it on TV. Since then the company has grown to own a portfolio of 45 unique brands, which includes the infamous Tinder dating app among many others.
The company reported its third-quarter numbers earlier week, and while the results came in lower year-over-year, the stock still managed to jump to a new high. The reason for the gap up? MTCH will finally start to monetize Tinder, which is a feat that many online companies struggle with.
Match Group was spun out from IAC/InterActiveCorp (NASDAQ:IAC) in November 2015 and there is a chance that it could once again be gobbled up by another large company. The synergies it provides to a bigger online media name are huge, and with a market capitalization of $8 billion, a deal is certainly achievable for an industry giant.
Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of FUTR Stocks and the ETF Bulletin. Matt just launched two new investment advisories focused around the “next” generation investing theme. His trademark three-prong investing approach targets the mega-trends old Wall Street is missing out on. Click here for more information on the “NexGen” Experience.