Just a few months ago, an article on hot stocks in the entertainment industry would have been pretty short. It would be the streaming content providers and any publicly trade jigsaw-puzzle-makers. Or perhaps makers of dartboards and billiards tables.
Now that the country is opening up, there are more options. That doesn’t mean some of the content providers still aren’t worth investing in, it just means there’s some variety now, and some stocks are worth grabbing now that the light at the end of the tunnel isn’t an oncoming new wave of pandemic.
This still isn’t the time to bet on mass outdoor activities, but there are some companies that provide the content that will get people out in the spring weather for do-it-yourself (DIY) projects and open up more entertainment options.
The seven hot entertainment stocks below are hot stocks that are worth your attention as the world and the markets heat up:
- Discovery Inc. (NASDAQ:DISCA)
- Dolby Laboratories (NYSE:DLB)
- SeaWorld (NASDAQ:SEAS)
- ViacomCBS (NASDAQ:VIAC)
- Nexstar Media (NASDAQ:NXST)
- Six Flags (NYSE:SIX)
- Pearson PLC (NYSE:PSO)
Hot Stocks: Discovery Inc. (DISCA)
Many people think they recognize DISCA by its eponymous Discovery Channel, Animal Planet, Science Channel and TLC (formerly The Learning Channel). But it’s a lot more than that.
It also owns The Food Network, HGTV and Travel Channel, a trio that will benefit mightily as the pandemic fades and entertaining and travel heat up once again. It also owns Eurosport, a sports channel in Europe that has distribution rights to the Olympics. Additionally, this year it launched Discovery+, a streaming service of all its channels.
It’s a content company, but it’s one that gets you out of your chair and doing something. The stock is up 22% year-to-date, yet it is still reasonably priced.
DISCA has a B rating and a buy recommendation in Portfolio Grader.
Dolby Laboratories (DLB)
Did you know that this seemingly most-American company was actually founded in London in 1965?
I say most-American because DLB has been the name attached to Hollywood films and American rock ‘n’ roll for decades. Ray Dolby developed a technology to reduce unwanted sound in recordings. He first applied it to music recordings and then expanded into film.
While there are plenty of personal and home devices these days that can read Dolby sound technology (since it’s now embedded in the content), the real boost for DLB is the reopening of movie theaters. It’s a play on the reopening of movies around the world.
DLB stock has been resting after a solid run, so it’s only up about 5% year-to-date. But a few months from now, it’s primed to be one of the hot stocks in headlines across financial media.
DLB has an A rating and a strong buy recommendation in Portfolio Grader.
In early March, SEAS announced its parks were reopening once again after being shut down during the pandemic. Since it’s headquartered in “theme park world” in Orlando, Florida, this opening is a big deal — for tourists and the local economy.
You see, SEAS also owns Busch Gardens, Aquatica, Discovery Cove and other parks as well.
This sector has been hard hit during the pandemic, but now there’s great expectation of pent-up demand that’s ready to be unleashed. And SEAS has been through tough times before. The exposé on animal harvesting for entertainment parks in 2013 did some significant damage, but SEAS recovered by changing its policies on wild capture and moving toward a greener view of its business.
The stock is up 61% year-to-date, as investors expect this to be one of the market’s hot stocks as summer heats up.
SEAS has an A rating and a strong buy recommendation in Portfolio Grader.
If you’re looking for a targeted media and entertainment company, VIAC is not it. It’s a massive multimedia organization that has streaming services, local and national television operations, films, cable, sports and even publishing.
But Wall Street doesn’t really like companies that are this diverse. It likes focused organizations so analysts don’t have to take a lot of externalities into account when valuing it. If they don’t understand it, they discount it.
And VIAC has been on a wild ride in the past year. It’s one of those hot stocks that’s been too hot to handle recently, and now it’s a bargain. There’s plenty of value here, and the rebounding economy will find it. The stock is up 3% year to date and is trading at a price-to-earnings (P/E) of 10.
VIAC has an B rating and a buy recommendation in Portfolio Grader.
Nexstar Media (NXST)
While streaming gets all the headlines these days, the fact is, local markets are still very powerful media vehicles. NXST is the largest television-station owner in the U.S., with nearly 200 stations that are affiliated with all of the four major networks.
In a world that’s constantly discussing how globally connected each individual is, many people prefer to keep it local. They want local news and local sports, and they want to know what’s happening in their local community.
NXST also owns a 31% share of The Food Network, as well as Chicago’s national WGN station.
Local stations generally rake in big money during election cycles, but this is an off year, so it’s a great time to step in. This hot stock is up 40% year-to-date, yet still trades at a current P/E below 9.
NXST has a B rating and a buy recommendation in Portfolio Grader.
Six Flags (SIX)
Theme parks. Water parks. Remember those? Well Six Flags and its collection of parks in the U.S. and Canada have the seventh-highest attendance in the world. Well, that stat was from 2019, since 2020 didn’t work out well for SIX and similar companies.
And unlike larger rivals that use theme parks to extend their brand, it’s all SIX really has.
But SIX joins the hot stocks list now because everyone is piling into the stock in anticipation of people piling into the parks. Six Flags has also seen tough times before. It filed for bankruptcy reorganization in 2009, reemerged in 2010 and has been going strong ever since.
2018 was a watershed year for the company and the stock had been slipping since then, so the company was already prepping its plans for renewal and increasing efficiencies. However, at this point, the stock is up nearly 40% year-to-date and has more headroom as parks begin to open up.
SIX has a B rating and a buy recommendation in Portfolio Grader.
Pearson PLC (PSO)
It may seem odd to have one of the world’s largest publishers in this article, given that publishers aren’t exactly the hot stocks they used to be. I mean, why read when there’s so much streaming to do?
But PSO is one of the largest online educational and assessment publishers in the world. And that means hybrid learning environments and rethinking how education is best accessed in coming months and years.
PSO was launched in the UK in 1844 and most famously publishes The Financial Times (FT) and The Economist. The story goes, that FT is published on pinkish paper because it was the cheapest paper to buy at the time and the tradition stuck since it now stands out among the competition. PSO is also the top coursework publisher in the U.S. and Canada.
This isn’t a sexy stock or a disruptive one, but it has staying power and a 2.3% dividend. Additionally, it’s up 23% year-to-date.
PSO has a B rating and a buy recommendation in Portfolio Grader.
On the date of publication, Louis Navellier has a position in DISCA in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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