In the back half of 2019, moviegoers were treated to an array of compelling new releases. It’s strange to think about this under the present context, but leading up to 2020, many folks were looking forward to the symmetrically pleasing year, in part due to media stocks. Of course, the novel coronavirus had a thing or two to say about that.
Indeed, the last thing anyone wanted to do during wave after wave of the SARS-CoV-2 virus was to go to the box office. Regrettably, major film distributors had to delay their flagship content into 2021 to salvage whatever they could from the terrible events of last year. In the meantime, several media stocks took a bruising due to the complete destruction of revenue channels.
After what seemed like forever, new daily coronavirus infections have finally started to come down. As of Feb. 22, data from the Centers for Disease Control and Prevention pegged the seven-day moving average of Covid-19 infections at just over 64,000. That’s a far cry from the early January peak, when the average hit nearly a quarter-of-a-million cases. Logically, this is a huge turning point for media stocks.
Now that we’re apparently entering a new paradigm of declining infections and better mitigation protocols, you can reasonably assume that consumers will gradually return to the cineplex. And that bodes very well for these media stocks, many of which have big releases later this year:
- ViacomCBS (NASDAQ:VIACA)
- Disney (NYSE:DIS)
- Comcast (NASDAQ:CMCSA)
- AT&T (NYSE:T)
- Sony (NYSE:SNE)
- Lions Gate Entertainment (NYSE:LGF.A, NYSE:LGF.B)
- Netflix (NASDAQ:NFLX)
Keep in mind that despite encouraging developments in the battle against Covid-19, we’re still not out of the woods. The situation could become endemic, particularly with new strains sprouting in different parts of the world. Therefore, exercise vigilance if you’re considering these media stocks.
Media Stocks to Watch: ViacomCBS (VIACA)
Among media stocks, ViacomCBS is not wasting anytime making up for the ground it lost in 2020. On a year-to-date basis, VIACA stock has gained over 72%, a blistering start to 2021. From the film release angle, it’s no surprise that investors are pumped up for ViacomCBS. Arguably, under its Paramount Pictures subsidiary, ViacomCBS has the most hotly anticipated film under its wing — Top Gun: Maverick.
Originally scheduled for last year, the coronavirus pandemic forced Paramount to push out Top Gun’s release date to July 2, 2021. It’s good that it did – this is a license to print money. After all, the original Top Gun sparked a military recruitment boom and I’m assuming for the U.S. Navy in particular.
With that kind of influence, you know that ViacomCBS has something special on its hands. Therefore, I’m excited what the future holds for VIACA stock.
At the onset of the coronavirus pandemic, Disney was one of the media stocks that suffered a steep decline from late February to the second half of March. But for the entertainment empire, it wasn’t just the movie business that impacted DIS stock. With basically everyone quarantined for long stretches throughout 2020, Disney’s theme parks and resorts revenue streams took a beating.
Even without the lockdown orders, who would want to brush shoulders with countless thousands of strangers during a pandemic?
Nevertheless, DIS stock enjoyed a rebound as investors recognized the power of the underlying Disney+ streaming unit. Thanks to compelling titles such as The Mandalorian, the Magic Kingdom was one of the winners of the streaming wars, according to CNBC.
Better yet, Disney via its Marvel Studios subsidiary will debut Black Widow on May 7, 2021. Starring Scarlett Johansson, that’s a good enough reason as any for moviegoers to watch the film.
Similar to its rival Disney, Comcast was one of the premiere media stocks with several compelling new releases, including F9, the ninth installment of the Fast and Furious franchise. What was particularly interesting to fans of the series was the return of Han, a beloved character that was apparently killed off.
Unfortunately, the pandemic ruined the anticipation of F9, along with other Comcast-related projects. Moreover, CMCSA stock absorbed serious punishment in the first half of 2020 due to the lockdowns. Again, with a mysterious and a deadly virus spreading around the world, the last thing people wanted to do was to frolic around at theme parks.
But thanks to the Covid-19 vaccine rollout, CMCSA stock may be back in business. One release I know I’m looking forward to is No Time to Die, which is likely Daniel Craig’s last appearance as James Bond. Distributed by Universal Pictures, it has a release date of Oct. 8, 2021.
Arguably, out of the media stocks on this list, AT&T is the most frustrating. I would know — I’m a shareholder of T stock. Originally, I had acquired shares at what was then a very good time to buy. Soon after my purchase, AT&T went flying … well, “flying” in AT&T terms.
Then, the coronavirus hit us, and T stock hasn’t looked the same sense. From late March/early April, shares are basically flat. And like a fool, I “diamond handed” my way down to losses. Let that be a lesson for everyone — don’t let social media memes dictate your investing strategies.
Now that I’m done bashing my own stock, AT&T does have compelling releases coming up via its Warner Bros. Pictures acquisition. Mainly, the tentatively titled The Matrix 4, which stars Keanu Reeves and Carrie-Anne Moss, presumably in the same roles that made them household names when the original came out, should be a runaway blockbuster.
If there’s any member of media stocks that truly benefitted from the Covid-19 pandemic, it’s Sony. Yes, the company’s box office business was greatly exposed to the crisis. However, the main narrative for SNE stock was the PlayStation 5 video game console. Given the enthusiasm for the latest console, Sony did not disappoint.
According to ScreenRant.com, by the end of 2020, the PS5 had sold over 4.5 million units. Keep in mind that it debuted in mid-November last year. With such a bonkers figure, Sony overtook its previous PS4 as the biggest console launch of all time. It’s safe to say that shareholders of SNE stock are happy with their investment — including yours truly.
Another reason to be bullish on the consumer electronics giant is Ghostbusters: Afterlife. Scheduled for release on June 11, the modern classic gets a revamp, with the hopes of drawing in a new generation to the franchise.
Lions Gate Entertainment (LGF.A, LGF.B)
Out of all the media stocks available, Lions Gate Entertainment truly resonates with me. Often distributing movies that are gritty and thought provoking, I’m always looking forward to their new releases, especially if we’re talking about horror films. One of my favorites — and it’s a fan favorite as well — is The Cabin In The Woods.
The film is just like my writing — completely out of left field and perhaps bordering on mental illness. If you haven’t checked it out, I highly recommend it. But that’s not the only reason to consider LGF.A stock.
Lions Gate doesn’t just specialize in horror. One of its upcoming films is The Courier, which will be released on March 19. A true story regarding a British businessperson who becomes unwittingly ensnared in a high-stakes geopolitical narrative set during the Cold War era, The Courier promises to deliver.
Plus, it stars Benedict Cumberbatch, which I suppose the ladies will love. LGF.A stock — it has something for everyone.
Among pure media stocks, Netflix is the standout winner. While society is gradually returning to normal thanks to declining Covid-19 cases and the encouraging vaccine rollout, we still don’t know how the consumer will respond returning to the box office.
According to a Deloitte survey conducted near the end of last year, most Americans are unwilling to go to the movie theater for the next six months. That’s going to put a monkey wrench for traditional media stocks, which are desperately banking on some normalization in the entertainment landscape.
But for NFLX stock, the above turmoil doesn’t matter. As a streaming firm, it can pump out its original content in a safe, contactless manner. Who knows? This may be the way of the future, irrespective of what happens with Covid.
I’m not a Netflix guy. I’m too cheap to pay for the service because I’d rather do dumber things with my money like gambling on cryptocurrencies. That said, Netflix has several films and shows coming up, including Marriage or Mortgage, which asks couples to choose between a dream wedding or a dream home.
With relevance up the wazoo, you can’t go wrong with NFLX stock.
On the date of publication, Josh Enomoto held a long position in T and SNE.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management and healthcare.