Following turns at the earnings altar and spinning quarterly results for Wall Street, media stocks Sirius XM (NASDAQ:SIRI), Spotify (NYSE:SPOT) and Tencent Music (NYSE:TME) are striking chords with bulls and bears. Let’s examine SIRI stock, SPOT, and shares of TME and see which are stocks to buy or names to short in your portfolio.
When the conversation of media stocks and streaming wars comes up, it’s hard not to think of Netflix (NASDAQ:NFLX), Disney (NYSE:DIS), Apple (NASDAQ:AAPL) or Roku (NASDAQ:ROKU). And for good reason. But it would be extremely short-sighted to think those companies are the end-all, be-all for making money.
Right now there are good opportunities in other media stocks which may be flying under your radar. Bottom-line, on the heels of recent earnings announcements and well-played post-report reactions, SIRI, SPOT stock and TME are stocks to buy and short for profits in the weeks ahead.
Sirius XM is the first of our post-earnings broadcasting stocks. SIRI stock also happens to be a buy. If you thought one of media’s original disruptors business fortunes had gone the way of fellow upstart TiVo (NASDAQ:TIVO) as streaming became mainstream, you’d be mistaken. A recent mixed-but-bullish SIRI stock quarterly report reaffirmed SIRI’s winning and profitable spot in today’s market space.
SIRI earnings also confirmed Wall Street is still listening. Technically, SIRI stock gained almost 4% in the aftermath of its quarterly confessional. Moreover, a bit of follow-thru in shares have filled a bearish gap and tackled the 62% retracement level within a healthy, common and near picture perfect 31% corrective cup-shaped base.
SIRI Stock Strategy: Buy SIRI stock today. My recommendation is a stop-loss below $6.33. This opens up risk of around 9%. The strategy only closes out the position if shares fall beneath the 50% retracement level and weekly closing highs within a low consolidation formed in front of earnings.
Spotify is the next of our post-earnings media stocks. Like Sirius, SPOT is also a stock to buy. The world’s largest streaming music platform posted a surprise and massive profit beat, solid subscriber growth, and topped Street sales views.
By the numbers, SPOT earnings saw profits of 40 cents per share blast estimates of a loss of 32 cents. Revenues of $1.92 billion ramped higher by 28% and narrowly beat forecasts of $1.9 billion, while monthly active users grew 30% to 248 million.
Technically, the report struck a chord with investors. SPOT stock spiked higher by 16%. Over the past several sessions shares have been busy consolidating those gains in a constructive pullback pattern. The observation is after two prior attempts at failing to break above Fibonacci resistance, the third time will prove the charm.
SPOT Stock Strategy: I’d recommend waiting on some upside price confirmation, but not too much. My advice is to buy SPOT stock if shares can reclaim $150. The entry for this stock to buy also rests on Spotify holding above $139. I’d use a pending daily or weekly chart pattern low as the stop-loss. If shares can rally, I’d smartly wait until $190 – $200 is challenged before taking partial profits.
Tencent Music is the last of our media stocks following earnings. TME isn’t a stock to buy though, it’s a short. Based on what I’m seeing from other strategists at InvestorPlace, I’m alone on this call. But after reporting ‘soothing results’ which failed to drum up support from investors, it’s time to respect what the price chart has to say.
Tuesday’s post-earnings aftermath saw TME stock fall 8%. More important to the bear case, shares established a weekly downtrend after confirming a lower high candlestick pattern. Price action also breached a support line tied to TME’s all-time low. And with stochastics signaling a bearish overbought crossover, all signs point to a short in this media stock.
TME Stock Strategy: TME stock is a short at current prices. To contain exposure, I’d suggest a stop-loss at $14.75. This exit allows for 12% of stock risk and is marginally above the weekly lower-high pivot. If conditions in this media stock go according to plan and new lows are formed, I’d look to take initial profits in-between $10 – $11 per share.
Investment accounts under Christopher Tyler’s management do not currently own positions in securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits