雅虎香港財經 13 Best News and Digital Media Stocks To Buy
In this article, we discuss 10 best news and digital media stocks to buy. If you want to see more stocks in this selection, check out 5 Best News and Digital Media Stocks To Buy.
According to Deloitte, it is expected that the media and entertainment industry will undergo further changes in 2023. Companies involved in film production and streaming services are dealing with their own disruption in the market and attempting to generate profits in a less lucrative environment. In addition to competing with each other for audience attention, time, and revenue, they are also contending with social media, user-generated content, and video games. Video games have progressed rapidly and appeal strongly to younger demographics.
In 2020, the entertainment industry experienced a significant decline, with music events canceled, theaters shutting down, and sports matches played without live audiences. However, in 2023, the industry is optimistic that it will be able to recapture the communal experience of sold-out events, crowded cinemas, and lively arenas.
Despite the challenges faced by the entertainment industry, consumers are returning to their preferred venues and platforms in promising numbers. Gower Street Analytics reports that the global box office reached $25.9 billion in 2022, marking a 27% increase from 2021. However, this is still 35% lower than the average for the three years prior to the pandemic. Live music revenue is predicted to surpass pre-pandemic levels by 2024, with digital music streaming subscriptions driving growth in recorded music. PwC estimates that recorded music revenues will rise from $36.1 billion in 2021 to $45.8 billion in 2026. Live theater is also making a comeback, with the Society of London Theatre reporting a 7.21% increase in attendance and 7.9% capacity in 2022 compared to 2019. While box-office revenue fell by 1.1% in real terms, Broadway shows grossed $51.9 million during the 2022 holiday week, up from $26.3 million for the same week the previous year. The sports industry is also proving to be particularly resilient, with teams projected to maintain growth in attendance and revenue despite a mild recession forecasted by Fitch for Q2 2023 in the US.
WARC's analysis in the beginning of March 2023 mentions various digital media companies that are taking ad revenue away from print media. For instance, Amazon.com, Inc. (NASDAQ:AMZN) generated $37.7 billion in ad revenue last year, which is 80% of what print media is predicted to make in 2023. Amazon.com, Inc. (NASDAQ:AMZN)'s ad revenue is expected to grow by 20.8% this year compared to 2022, and it's likely that their global ad revenue will soon surpass that of print media. According to the report, Alphabet Inc. (NASDAQ:GOOG) and Meta Platforms, Inc. (NASDAQ:META) will probably earn almost $400 billion in ad revenue this year, which accounts for about 40% of the total worldwide share. Meanwhile, ad revenue for traditional video, audio, and out-of-home advertising is projected to grow by only 1.6% compared to 2016, despite the shift from legacy to digital platforms. Although the migration from legacy to digital has been prominent in other forms of media, it has not been as widespread for print media.
Not too long ago, print media used to dominate the global advertising revenue. According to WARC, in 1980, print media accounted for 62.4% of all global ad spending, and it wasn't until 2001 that television overtook newspapers in terms of ad revenue. By 2010, despite the emergence of the digital advertising opportunities provided by Google and Facebook, print media still accounted for around 30% of global ad revenue. However, in 2007, the global ad revenue for print newspapers reached its peak at $121.4 billion, but WARC predicts that by 2023, it will fall to $22.8 billion.
Although the future of print media looks gloomy, there have been a few positive developments. According to media analyst Brian Morrissey, in an interview with WARC, The New York Times Company (NYSE:NYT) has been a prominent example of success in digital ad revenue, providing a sustainable and profitable business model for news companies. The newspaper has experienced a surge in digital subscription revenue during the Trump presidency and the COVID-19 pandemic, making it a model for success for other news organizations to follow.
Some of the best entertainment stocks to invest in include Netflix, Inc. (NASDAQ:NFLX), Warner Bros. Discovery, Inc. (NASDAQ:WBD), and The Walt Disney Company (NYSE:DIS).
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Our Methodology
For this article, we specifically chose news and digital media stocks among the broader entertainment sector, while omitting sub-sectors like advertising and gaming. We scanned Insider Monkey’s database of 943 hedge funds and picked the top 13 companies that provide services in the news and digital media sector with the highest number of hedge fund investors. These are the best news and digital media stocks to buy according to hedge funds.
Best News and Digital Media Stocks To Buy
13. Digital Media Solutions, Inc. (NYSE:DMS)
Number of Hedge Fund Holders: 7
Digital Media Solutions, Inc. (NYSE:DMS) is a digital performance marketing company in the United States that offers a software delivery platform. It has three main segments – Brand Direct, Marketplace, and Technology Solutions, and serves various industries such as consumer finance, e-commerce, and education. The company also provides managed services and marketing automation software to help clients control their advertising spends. Digital Media Solutions, Inc. (NYSE:DMS)’s full year 2022 results showed a full year net revenue of $391 million, above the firm’s guidance of $385 million to $390 million.
On March 6, Digital Media Solutions, Inc. (NYSE:DMS) declared that it will purchase HomeQuote.io, a home services marketplace, as well as the media and technology assets of the ClickDealer international ad network from Customer Direct Group. The acquisition will cost $35 million at closing, with the possibility of an additional $10 million of contingent consideration being paid based on performance over the next two years. Following the acquisition, Digital Media Solutions, Inc. (NYSE:DMS) anticipates adding $70 million to $80 million to its FY2023 revenue and predicts a positive impact on its FY2023 earnings.
According to Insider Monkey’s fourth quarter database, 7 hedge funds were long Digital Media Solutions, Inc. (NYSE:DMS), compared to 6 funds in the prior quarter.
Like Netflix, Inc. (NASDAQ:NFLX), Warner Bros. Discovery, Inc. (NASDAQ:WBD), and The Walt Disney Company (NYSE:DIS), Digital Media Solutions, Inc. (NYSE:DMS) is one of the best entertainment stocks to invest in.
12. BuzzFeed, Inc. (NASDAQ:BZFD)
Number of Hedge Fund Holders: 10
BuzzFeed, Inc. (NASDAQ:BZFD) is a digital media company that distributes content on various platforms, including BuzzFeed, BuzzFeed News, Tasty, HuffPost, and Complex Networks. It offers entertainment, pop culture, news, opinion, lifestyle, and other content through articles, videos, lists, quizzes, and original series. It is one of the best entertainment stocks to invest in. In Q4 2022, BuzzFeed, Inc. (NASDAQ:BZFD) reported a revenue of $134.62 million, beating market estimates by $3.37 million. The company expects overall revenues in the range of $61 million to $67 million during Q1 2023.
The value of BuzzFeed, Inc. (NASDAQ:BZFD)’s increased in late January after reports emerged that Meta Platforms, Inc. (NASDAQ:META) had entered into a deal with BuzzFeed worth close to $10 million. Under the agreement, BuzzFeed will create content for Facebook and Instagram, which has helped drive the increase in the stock price.
According to Insider Monkey’s fourth quarter database, 10 hedge funds were bullish on BuzzFeed, Inc. (NASDAQ:BZFD), compared to 8 funds in the third quarter.
11. Gannett Co., Inc. (NYSE:GCI)
Number of Hedge Fund Holders: 17
Gannett Co., Inc. (NYSE:GCI) is a US-based company that provides media and marketing solutions. It has two main segments - Gannett Media and Digital Marketing Solutions. Its primary offerings consist of daily and weekly print media, sports networks, and websites that cater to local audiences. It is one of the best entertainment stocks to invest in. On February 23, Gannett Co., Inc. (NYSE:GCI) experienced a 17% surge in its stock price after surpassing its earnings per share expectations in Q4 2022. This positive result was driven by a 24% increase in digital-only paid subscriptions, reaching a total of 2.03 million, and a 29% rise in digital-only circulation revenues, which reached $35.5 million.
According to Insider Monkey's fourth quarter database, 17 hedge funds were bullish on Gannett Co., Inc. (NYSE:GCI), compared to 14 funds in the prior quarter. Jeremy Carton and Gilbert Li's Alta Fundamental Advisers is the largest position holder in the company, with 7.7 million shares worth $15.7 million.
10. Thomson Reuters Corporation (NYSE:TRI)
Number of Hedge Fund Holders: 19
Thomson Reuters Corporation (NYSE:TRI) offers business information services across the Americas, Europe, the Middle East, Africa, and the Asia Pacific regions. The Reuters News division provides financial, business, and international news to professional organizations, media outlets, and news consumers via a range of platforms including Reuters News Agency, Reuters.com, and Reuters Events. It is one of the best entertainment stocks to watch.
On April 5, Credit Suisse increased its price target for Thomson Reuters Corporation (NYSE:TRI) to $150 from $138 and maintained an Outperform rating on the shares. The decision is based on Thomson Reuters Corporation (NYSE:TRI)’s plan to give back $2.2 billion to shareholders through a $4.67/share cash distribution from the proceeds of share sales in LSEG. In addition, the company has announced a reverse stock split that will be proportional to the cash distribution, based on the average-weighted trading price five days before the transaction versus the cash distribution, the firm informed investors.
According to Insider Monkey’s fourth quarter database, 19 hedge funds were bullish on Thomson Reuters Corporation (NYSE:TRI), compared to 26 funds in the earlier quarter. James Parsons’ Junto Capital Management is the largest stakeholder of the company, with 834,183 shares worth over $95 million.
9. Nexstar Media Group, Inc. (NASDAQ:NXST)
Number of Hedge Fund Holders: 31
Nexstar Media Group, Inc. (NASDAQ:NXST) operates in the field of television broadcasting and digital media. Its main focus is on acquiring, developing, and running television stations as well as interactive community websites and digital media services across the United States. It is one of the best entertainment stocks to invest in.
As per Wells Fargo, Nexstar Media Group, Inc. (NASDAQ:NXST) has given guidance of high-single to low-double digit percentage growth in gross retransmission for 2023. Although the debates surrounding retransmission are well understood, they may not be completely settled. The firm believes that while the retrans debates are de-escalating, there is still some risk in the guidance provided. Therefore, Wells Fargo prefers to stay on the sidelines with an Equal Weight rating and a $175 price target for Nexstar Media Group, Inc. (NASDAQ:NXST) shares as of March 21.
According to Insider Monkey’s fourth quarter database, 31 hedge funds were bullish on Nexstar Media Group, Inc. (NASDAQ:NXST), compared to 32 funds in the prior quarter. Amy Minella’s Cardinal Capital is the largest stakeholder of the company, with 943,570 shares worth over $165 million.
In addition to Netflix, Inc. (NASDAQ:NFLX), Warner Bros. Discovery, Inc. (NASDAQ:WBD), and The Walt Disney Company (NYSE:DIS), Nexstar Media Group, Inc. (NASDAQ:NXST) is one of the best entertainment stocks to watch.
Here is what Richie Capital Group has to say about Nexstar Media Group, Inc. (NASDAQ:NXST) in its Q1 2022 investor letter:
“Nexstar Media Group (NXST up 24.8%) – The television broadcasting and digital media company surged during the quarter after presenting at an investor conference where management pointed to a strong 2022 for both political advertising and retransmission. They have exposure to more than 80% of markets with competitive mid-term political races. NXST is developing new ad categories such as sports betting and they are focused on expanding digital ad revenue and providing digital solutions to local advertisers. Auto advertising will return in the fall as auto dealerships re-enter the market to sell their replenished inventory.”
8. Nasdaq, Inc. (NASDAQ:NDAQ)
Number of Hedge Fund Holders: 35
Nasdaq, Inc. (NASDAQ:NDAQ) is a global technology company that provides services to capital markets and other industries. The company is divided into three segments, namely Market Platforms, Capital Access Platforms, and Anti-Financial Crime. The Capital Access Platforms segment focuses on the sale and distribution of historical and real-time market data, the creation and licensing of Nasdaq-branded indexes and financial products, the operation of listing platforms, and the provision of investment insights, workflow solutions, investor relations intelligence, ESG solutions, and governance solutions. It is one of the best news and digital media stocks to watch.
Michael Cyprys, an analyst at Morgan Stanley, lowered the rating of Nasdaq, Inc. (NASDAQ:NDAQ) from Overweight to Equal Weight and decreased the price target to $60 from $70 on April 11, citing the uncertain macro outlook and recent market events.
According to Insider Monkey’s fourth quarter database, 35 hedge funds were long Nasdaq, Inc. (NASDAQ:NDAQ), compared to 32 funds in the prior quarter. Ric Dillon’s Diamond Hill Capital is the largest stakeholder of the company, with 4.8 million shares worth $294.5 million.
TimesSquare Capital made the following comment about Nasdaq, Inc. (NASDAQ:NDAQ) in its Q3 2022 investor letter:
“A boost to the portfolio came from Nasdaq, Inc. (NASDAQ:NDAQ) and its 12% advance. They serve capital markets and other industries worldwide, while continuing to make strategic moves towards more recurring revenues. Second quarter earnings exceeded Street projections due to the combination of higher revenues and lower expenses. Areas of strength were Investment Intelligence, their Corporate Platforms segment, and Market Technology.”
7. DISH Network Corporation (NASDAQ:DISH)
Number of Hedge Fund Holders: 37
DISH Network Corporation (NASDAQ:DISH) is a US-based company that offers pay-TV services along with its subsidiaries. The company is divided into two segments – Pay-TV and Wireless. It is one of the best entertainment stocks to invest in. On March 13, Citi analyst Michael Rollins maintained a Buy rating on DISH Network Corporation (NASDAQ:DISH) but lowered the firm's price target on Dish to $18 from $33. Rollins has modified the firm's financial model based on the Q4 results, which now includes greater costs of capital and increased investments in network expansion. Additionally, the firm has recognized heightened risks for DISH Network Corporation (NASDAQ:DISH) in both the operational and financial environment. Regardless, DISH Network Corporation (NASDAQ:DISH) remains a Buy-rated stock at Citi.
According to Insider Monkey’s fourth quarter database, 37 hedge funds were long DISH Network Corporation (NASDAQ:DISH), compared to 40 funds in the last quarter. Boykin Curry’s Eagle Capital Management is the biggest stakeholder of the company, with 15.3 million shares worth $215.2 million.
Here is what ClearBridge Investments has to say about DISH Network Corporation (NASDAQ:DISH) in its Q2 2021 investor letter:
“Portfolio holdings in the communication services and financial sectors also made strong contributions. Dish Network continues to make progress on the buildout of its greenfield 5G network, with Las Vegas slated to become the first market launched later this year. The company gained credibility, and its stock reacted favorably, after it announced a partnership with Amazon to deploy a 5G cloud-native network using AWS’s cloud infrastructure. While the stock has been volatile in recent quarters, we continue to feel confident in Dish’s long-term prospects, which include competing as a fourth U.S. wireless carrier. Charter Communications has been executing well and benefiting from the growth in residential broadband, which has been accelerated by COVID-19 and should see further support from the Biden Administration’s infrastructure bill, which earmarks $65 billion for broadband buildout. In addition, we expect the company to continue to grow its wireless business, leveraging its mobile virtual network operator (MVNO) relationship with Verizon. The company continues to generate strong and growing free cash flow and deploys it toward consistent and material share buybacks.”
6. Paramount Global (NASDAQ:PARA)
Number of Hedge Fund Holders: 38
Paramount Global (NASDAQ:PARA) operates as a media and entertainment company worldwide. The company has three main segments – TV Media, Direct-to-Consumer, and Filmed Entertainment. It is one of the best entertainment stocks to watch. On March 28, Bank of America upgraded Paramount Global (NASDAQ:PARA) from Neutral to Buy and raised the price target on the shares from $24 to $32. According to the firm’s research note, Paramount Global (NASDAQ:PARA) possesses a distinctive set of assets that would pique significant buyer interest if the company were ever to be sold. The firm also believes that the reports of potential buyers reinforce its buying argument for Paramount Global (NASDAQ:PARA). BofA argued that the company's portfolio's inherent asset value offers a safeguard for the stock's value in the short and medium term.
According to Insider Monkey’s fourth quarter database, 38 hedge funds were long Paramount Global (NASDAQ:PARA), compared to 40 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the largest stakeholder of the company, with 93.6 million shares worth $1.58 billion.
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Disclosure: None. 13 Best News and Digital Media Stocks To Buy is originally published on Insider Monkey.
