5. iHeart Media Inc. (NASDAQ:IHRT)
Market Cap: $229.76 million
Number of Hedge Fund Holders: 14
iHeart Media Inc. (NASDAQ:IHRT) is a mass media corporation dominant in the radio broadcasting industry. It provides listeners with many music and entertainment options through traditional and digital channels.
The Digital Audio Group is a big segment for the company, with a 31% contribution to the total revenue in just Q2. This also represented a 10% year-over-year improvement in the segment. Within the Digital Audio Group, podcast revenues grew 8%, whereas non-podcast revenues rose 10%.
However, the company’s overall revenue improvement was only 1% year-over-year. The revenue resultantly was $929.09 million, higher than what analysts had anticipated, but almost flat compared to the last year. This 1% revenue growth was driven by political ad mainly, and if that segment had not been considered, the overall year-over-year revenue increase would only be 0.1%. Moreover, the loss per share in Q2 was $6.50.
It is the exclusive audio partner for NBC’s 2024 Summer Olympics coverage. This includes a new podcast and live streaming. Under a recent partnership between iHeartPodcasts, Universal Television, and Wolf Entertainment, “Law & Order: Criminal Justice System” will be distributed by iHeartPodcasts. This is the first-ever investigative true-crime podcast series by Law & Order, premiering on August 22.
The company has a strong broadcast radio foundation, which helped it build the iHeartRadio app, a leading digital radio service, and a live events business. When we see that iHeart Media Inc. (NASDAQ:IHRT) reached 110 million Americans monthly through 3,000+ websites, and has increased its social media presence 7 times, we can tell that the company is positioned for success in the broadcast industry. This is why it makes it to our top broadcasting stocks to buy.
Of 14 hedge fund holders, AQR Capital Management has the largest stake in the company, as of June 30. It has a position of $4,261,605.
Palm Harbour Capital made the following comment about iHeartMedia, Inc. (NASDAQ:IHRT) in its Q1 2023 investor letter:
“The second largest detractor was iHeartMedia, Inc. (NASDAQ:IHRT) (-37.5% -58 bps), the American radio and podcasting company. The company suffered two self-inflicted wounds, which will impact the first quarter. The first, which the company flagged as temporary was a change in sales incentives. Apparently, they changed their sales force behaviour to sell more lower margin products at the expense of higher margin products (where management believed it should have been incremental volumes of lower margin not a switch). The second was their guidance for interest rate expense. The company did not hedge their floating term loan and is suffering from the higher interest rate environment, something you do not want to see in a highly levered company. Their debt maturities are years out, but every quarter that passes where free cashflow is low will make refinancing more difficult. Up until now, the company has been executing well, and their podcast business is growing strongly. Management has also been buying shares and we believe their major shareholder, if allowed by the Federal Trade Commission, is potentially interested in owning the business.”
