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Wall Street remained in a cheery mood Friday as the Dow Jones Industrial Average closed at 14,395.76 — up just +0.5%, but still a new high. Investors were encouraged after the Labor Dept reported that the unemployment rate in February fell to 7.7% from 7.9%, the lowest its been in four years. And the good feelings spilled over to media companies. The Dow Jones U.S. Media Index was up 1.2% to its highest level in in more than a decade as companies including CBS, Discovery, and Disney set new all-time highs. CBS (+2.3%) led the Big Media pack today followed by News Corp (+2.1%), Disney (+1.9%), Viacom (+1.7%), Time Warner (+1.2%), Comcast (+0.9%), and Sony (+0.3%). Among media companies generally, Pandora was up 17.6% after last night’s better-than-expected earnings report. Others up at least 3% include Best Buy (+4.7%), DreamWorks Animation (+4.0%), Rovi (+4.0%), and Cinedigm (+4.0%). The few companies that lost ground only lost a little and included Facebook (-2.2%), National CineMedia (-0.9%), Charter (-0.8%), Cablevision (-0.1%), and Google (-0.1%).
Media Stocks Continue To Be Buoyed As Market Hits Another All Time High
Media Celebrate Stock Market’s Record High
The Dow Jones Industrial Average closed today at 14,253.77, topping the previous record high in 2007 — and other benchmarks aren’t far behind. Analysts say the rally reflects growing optimism about the economy, especially after the Institute … Read More »
Comcast And Carmike Steal The Show In An Unusually Strong Year For Media Stocks
The competition was tough — most media stocks not only appreciated in 2012, they handily beat the benchmark Standard & Poor’s 500 which was up 13.4%. Comcast led the pack of Big Media conglomerates with shares +57.6%, followed by News Corp (+43.0%), CBS (+40.2%), Disney (+32.8%), Time Warner (+32.4%) and Viacom (+16.1%). Sony was the only member of this group to lose ground, falling 37.9% as it struggles to fix its global TV and electronics sales operations. Within the universe of other companies that we track most closely, the biggest winners were Carmike (+118.7%), Lionsgate (+97.1%), AOL (+96.1%), Lin TV (+78.0%), and Sirius XM (+58.8%). The losers: Best Buy (-49.3%), Martha Stewart Living Omnimedia (-44.3%), Sony, Rovi (-37.2%), and Facebook (-30.0% since it went public in May.).
How Much Longer Can The Bull Market For Big Media Stocks Last?
Wall Street’s Big Media bulls have had a great run. Stocks for the group of companies that includes Disney, News Corp, Time Warner, CBS, Viacom, and Discovery have outpaced the overall market for more than three years. And just this year, the Dow Jones U.S. Media Index has appreciated 35% while the benchmark Standard & Poor’s 500 rose 15%. Yet I’ve been struck lately by the growing number of reasons to suspect that the joy ride is about to end. They started to crystallize for me today when I read Cowen and Co analyst Doug Creutz’s “State Of Big Media” report making the case to remain “moderately positive” about the sector. Like most of his analyses, it’s smart and identifies the important questions that the Street will want CEOs to address in the upcoming Q3 earnings season. But Creutz’s case for remaining optimistic is so meek that you’d think it was prepared by the guy who coached President Obama for his first debate with Mitt Romney.
Creutz starts by cautioning investors that media stocks have become expensive. The big companies that he covers trade for 14 times earnings, ahead of the S&P 500′s 13.3 times. That’s quite a change from last year when the stocks traded for 11.5 times their earnings, in line with the overall market. As a result, he says, “we think outperformance over the next 12 months is likely to be more modest than that enjoyed over the last few years.” On top of that, the analyst notes that his upbeat case assumes that the economy can “muddle through” the next year. He says that the “#1 risk to Big Media stocks, by a wide margin” is the possibility of a global downturn — which could be triggered if a European country defaults on its debt, or there’s no resolution in the U.S. to the rush off the so-called “fiscal cliff.” Read More »
Media Stocks Outpaced The Market In Q3
Investors seemed to like almost any business that was tied to pay TV and tech, and that was relatively insulated from the economic turmoil in Europe. The Dow Jones U.S. Media Index rose 11.6% in the three months that ended today, turning in a far better performance than the benchmark Standard and Poors’ 500 (+5.8%) and the Dow Jones Industrial Average (+4.3%). Time Warner led the Big Media pack, with a 17.7% rise in its stock. It was followed by Viacom (+14.1%), Comcast (+11.9%), CBS (+10.8%), News Corp (+10.1%) and Disney (+7.8%). Share prices for Sony — still struggling to right its electronics businesses — fell 17.8%. Read More »
Big Media Stocks End Week On A High Following The Fed’s Stimulus Moves
The Federal Reserve’s announcement yesterday that it will try to bolster the economy with purchases of mortgage-backed securities contributed to a sense of giddiness among investors in media stocks. CBS, Charter Communications, Comcast, DirecTV, Discovery, News Corp, Time … Read More »
Media Stocks Join Wall Street Rally Over Hopeful Signs About Jobs And Europe
Media investors ended the week on a cheery note after the market recorded its strongest rally since early May. The benchmark Standard & Poor’s 500 closed the day +1.9% following a better than expected jobs report … Read More »
Media Stocks Join Wall Street Rally On Optimism About Economic Relief
Speculation that a major central bank will help to stimulate the global economy contributed to a roughly 2% gain in the market in mid-afternoon trading, pushing stocks back into positive territory for 2012. The Dow Jones U.S. … Read More »
Media Stocks Down As Disappointing Jobs Report Chills Investors
Market benchmarks are down more than 2% this afternoon — the biggest one-day drop so far this year — following the Labor Department’s report that the economy added 69,000 jobs in May, far fewer than economists expected. And … Read More »
Media Stocks Hit As Investors Weigh Federal Reserve Plans For Economy
Stock markets grappled with the worst day they’ve had so far in 2012 after a Federal Reserve report suggested that the central bank won’t continue to boost the economy by aggressively buying bonds. The Dow Jones U.S. Media … Read More »
Big Media Stocks Could Hit 52-Week Highs In Industry’s “Golden Time”: Video
Giants including CBS, Discovery, Disney, and News Corp are poised to hit one-year highs today on Wall Street, benefiting both from the improving economy — and developments within media. RBC Capital Markets analyst David Bank tells CNBC that this is “a golden time” for the industry, although he adds that … Read More »
Media Stocks Down As Fear Of Global Economic Downturn Spreads
Barring a last-minute turnaround, this could be the worst day for U.S. stock exchanges since November. The U.S. Media Index is -1.7% in mid-afternoon trading, worse than the Dow Jones Industrial Average and Standard and … Read More »
Media Stocks Join Market Exuberance Over Effort To Stabilize Banking System
The benchmark Standard & Poor’s 500 was up 4.3% today after central banks in the U.S., Europe, and Japan said that they’d help supply cash to avoid a credit crunch if the European debt crisis worsens. That … Read More »
Media Stocks -5.4% As Fresh Data Suggest The Economy Continues To Weaken
The bears are back. After a relatively calm week, stocks prices across the board — including in media — are tanking today following reports that point to rising unemployment and inflation, and weakness in manufacturing. An hour before … Read More »
UPDATE: Netflix Shares Close -4.1% After Price-Hike Backlash; Blockbuster Offers Deal To Lure Rival’s Angry Subscribers
UPDATE: 12:00 PM: Rival Blockbuster has just pounced on Netflix’s public relations problem, announcing that it is launching a nationwide promotion in which existing Netflix customers who switch to one of Blockbuster’s two Total Access plans (1 disc at a time for $9.99 a month or 2 discs at a time for $14.99 a month) will receive a 30-day free trial. The company, which recently was purchased at a bankruptcy auction by Dish Network, said that besides a lower price it offers benefits Netflix doesn’t: availability of many new releases 28 days before Netflix, unlimited in-store exchanges, video game rentals and no extra charge for Blu-ray movies. “Blockbuster quickly responded to the cries of Netflix customers,” Blockbuster president Michael Kelly said in the release announcing the promotion. “Blockbuster Total Access is Netflix ‘without the wait.’ The combination of DVDs by mail and unlimited in-store exchanges provides more than 100 million people living near Blockbuster stores immediate convenience and unparalleled choice.” The offer is good through Sept. 15; Netflix customers can go to Blockbuster’s website to enroll or show a red Netflix envelope at a Blockbuster store.
PREVIOUS, 10:11 AM: It’s shocking to see how badly Netflix appears to have underestimated the general confusion and anger that has followed the announcement on Tuesday that it’s raising by 60% the price of its combo DVD-by-mail rental and video-streaming service. More than 5,000 mostly furious customers responded to the Netflix blog post unveiling what BTIG analyst Richard Greenfield calls “perhaps the boldest single move in (Netflix) history.” And Netflix shares are down about 3.6% in midday trading as Wall Street wonders whether the company raised prices enough to cover revenue it will lose from people who cancel the service. Lazard Capital Markets’ Barton Crockett says that “few will pay the jarringly higher price” for the streaming and DVD combo plan and “most will move to (Netflix’s) cheaper streaming-only” service. Netflix could lose some of its most profitable customers — the ones who pay the monthly fee for DVD rentals but don’t bother to order many discs. Merriman Capital’s Eric Wold says he “would not be surprised” if many of those subscribers bailed on Netflix to rent DVDs from Redbox’s $1-a-night kiosks. But Goldman Sachs’ Ingrid Chung says Netflix will probably come out ahead: The company makes a much higher profit from streaming than it does from DVD rental, and “a very high number of subs would have to churn off to offset the pricing increase.” Read More »
News Corp Shares Plunge -7.1% & BSkyB -7.5% Over UK Scandal Fears
News Corp In Effect Withdraws BSkyB Bid? Has UK Phone-Hacking Scandal Sunk Rupert Murdoch’s Biggest Deal?
Shareholders Sue News Corp Over Scandal: Corporate Governance “Culture Run Amok”
Investors are clearly concerned that News Corp doesn’t have the appetite anymore to … Read More »
Netflix Shares Rally On Plan To Expand Into Latin America And The Caribbean
Netfllix shares jumped 7.6% as of mid-day after the company said it will offer its Web streaming service through Latin America and the Caribbean later this year. Investors are hoping that audiences in other countries will respond as enthuiastically as U.S. consumers have to the home video company’s service. Netflix had 22.8 million domestic subscribers at the end of March. But a lot depends on how much the international services will cost — and whether studios provided Netflix with licensing rights to offer the same movies and TV shows abroad that it provides to U.S. subscribers.
Netflix doesn’t offer many details about its plans. Here’s the release: Read More »
Investors Slam Movie Theater Chains As Box Office Sales Miss Expectations
Movie theater chains Regal and Cinemark are taking it on the chin on Wall Street this morning after a weekend of disappointing box office sales — and the close of an even more dispiriting quarter. Regal’s stock price … Read More »
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