In this article, we will talk about the 10 best broadcasting stocks to buy.
Current Dynamics in the Global Broadcasting Market
Technological advancements have transformed the global broadcasting market, just as much as any other industry. Innovation has elevated the broadcasting experience for an average viewer, offering a wide range of rich and high-quality content. Hence, in 2022, we had a global broadcasting market valued at $343.35 billion, as reported by Grand View Research. By 2030, this number could reach $448.34 billion, growing at a compound annual growth rate of 3.9% through the forecast.
As machine learning and AI help gain companies a competitive edge, AI-powered solutions are being used in broadcasting to enhance video quality, streamline live broadcasts, and personalize user experiences.
For instance, Korbyt, a workplace experience platform, recently launched its Machine Learning Broadcast solution, which uses an AI-powered camera to adjust content based on viewer engagement. In essence, it uses smart technology to show different content on screens based on who’s watching and how they react. So, if people are spending a lot of time looking at a certain ad, Korbyt might show that ad more often. It can even optimize recommendations according to people’s preferences and create new content for them.
The global advertising and broadcast industries are also close and benefit from one another. One impact currently is the surge in political advertising spending on broadcasting platforms due to the US election campaign. As the demand for advertising space across various platforms rises, advertising rates for broadcasting companies with increase and boost their revenues.
Forbes reported that the total spending reached $8.5 billion across TV, radio, and digital media in the last election cycle. This was 30% higher than the $6.7 billion projected earlier that year, and 108% more than spending in 2017-2018, which was a record at that time. GroupM projects a record-breaking $15.9 billion investment in political ad spending for the end of 2024.
As campaigns intensify their advertising efforts, especially in the weeks preceding the election, broadcast companies can anticipate a significant rise in revenue, given the heightened demand for airtime to reach voters.
According to Emarketer, 45% of the total digital political ad spending will be seen on CTV (connected TV). As major companies in the networking, entertainment, and streaming industry continue their ban on political content, the major benefit of this spending will go to broadcasting companies.
Goldman Sachs’ Jonny Fine, the global head of investment grade debt, in a recent discussion, mentioned that the US election will likely be a big market event. He says that the outcome could most definitely differ depending on which candidate emerges victorious, but investors need to be prepared for the potential market volatility nonetheless. However, when it comes to realizing short-term gains from elections, the 2019-2020 US election cycle advertising spending validates the projections for this year.
The Business Research Company reports that North America dominated the broadcast market in 2023, but Asia-Pacific is expected to grow the fastest in the coming years. With a promising growth potential, this industry can reward those who watch it closely and observe its dynamics. In this context, we are here with a list of the 10 best broadcasting stocks to buy.
Methodology
To compile our list, we sifted through ETFs, stock screeners and online rankings to compile a list of 15 best broadcasting stocks to buy. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q2 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Broadcasting Stocks to Buy
10. CuriosityStream Inc. (NASDAQ:CURI)
Market Cap: $71.53 million
Number of Hedge Fund Holders: 3
CuriosityStream Inc. (NASDAQ:CURI) is a streaming service with a focus on educational content. It offers many documentaries, series, and courses on topics of science, history, nature, and technology.
In the second quarter of 2024, the company increased its direct subscription revenue sequentially and year-over-year. The direct business generated $9.8 million, up 17% from a year ago and 3% from Q1. This resulted in a total revenue of $12.40 million for the company in Q2. The loss per share was $0.04.
In Q2, the company announced a $4 million share repurchase program, with plans to buy back shares through open market purchases or private negotiations. It successfully repurchased 22,001 shares, has no expiration date, and can be modified or stopped at any time.
CuriosityStream Inc. (NASDAQ:CURI) teamed with Estrella MediaCo. to launch the first 3 Spanish-language FAST channels on Samsung TV Plus. It also launched a distribution partnership with Harbour Rights, a company in Hong Kong, to bring premium content to platforms like TV, VOD, and inflight entertainment across Asia. 3 new programming initiatives were taken to enhance content discoverability and promotion, and other original series and specials were premiered.
Management says that the company is exploring licensing its assets (like footage, programs, audio, code, and images) to different GenAI companies, like Google and OpenAI, to sell or rent the rights to its content for training LLMs. With such plans to expand innovatively, the company can be expected to reward those who invest in it. This makes it one of our top broadcasting stocks to buy.
Of its 3 hedge fund holders, Renaissance Technologies has the biggest stake with a value of $458,424 as of June 30.
9. Saga Communications, Inc. (NASDAQ:SGA)
Market Cap: $95.40 million
Number of Hedge Fund Holders: 5
Saga Communications, Inc. (NASDAQ:SGA) is devoted to acquiring, developing, and operating broadcast properties. It owns and operates radio and television stations to broadcast shows, news, music, and advertisements over the airwaves.
Two main revenue contributors for the company are its ‘streaming’ and ‘best of’ segments. Streaming was up 34%, and the best of program, which is essentially just a community online voting process for burgers, dentists, and so on, was up 15%. Despite these surges, the year-over-year growth fell 1.48%, generating a revenue of $28.74 million in Q2. The earnings per share were $0.4.
Saga Communications, Inc. (NASDAQ:SGA) is also expanding its services into online news and community sites in 18 markets, inspired by the need for local news during deployments. The first online news site, ClarksvilleNOW, prioritizes practical local news and avoids opinion pieces and in-depth investigative reporting.
The company expects to report its financial performance on a “same-station basis”, as it purchased a group of radio stations in Lafayette, Indiana in Q2.
The company is building a community by fostering connections through initiatives like the one where listeners share their struggles with a radio personality and seek support. With an emphasis on hyper-local coverage and community involvement, this company can expect exponential growth. As its expenses are also stabilizing, there’s room for future growth, making this a top broadcasting stock to buy.
The stock is held by 5 hedge funds, and Minerva Advisors has the largest stake with a value of $3,617,397, as of June 30.
Merion Road Capital stated the following regarding Saga Communications, Inc. (NASDAQ:SGA) in its fourth quarter 2023 investor letter:
“Like the broader small-capitalization market, most (all) of our returns came in December. Unlike the index, however, this was driven by a few catalysts that positively impacted our portfolio. Entering December our second largest position was in an oil and gas company, Unit Corp (“UNTC”). UNTC declared a special and common dividend equal to 40% of its then market capitalization. Similar to UNTC, our position in the small radio broadcaster, Saga Communications, Inc. (NASDAQ:SGA), benefitted from a special dividend equal to 10% of its then market capitalization.”
8. Urban One Inc. (NASDAQ:UONE)
Market Cap: $99.10 million
Number of Hedge Fund Holders: 5
Urban One Inc. (NASDAQ:UONE) is the largest African-American-owned broadcasting company in the US, with over 50 radio stations. It provides content, entertainment, and services that resonate with its African American audience.
The company launched TV One and CLEO TV on its Xfinity TV Now service, which will likely broaden its audience reach. It is benefiting from the current political climate, by anticipating a boost in political advertising revenue. This is especially important as Q2 advertising revenue was down 26.7%.
The company has been struggling with its cable TV and digital segment revenue, with a 21% and 16% drop respectively. Resultantly, there was a year-to-year drop of 9.2%. On a same-station basis, the revenue fell 3%. The revenue recorded was $117.7 million, with a loss per share of $0.94. Some of these drops were offset by a 7.2% year-over-year increase in radio broadcasting revenue.
The company is currently focused on mitigating the challenges in the cable television sector by using new technology. A specific measure was using a connected TV ad server, improving the monetization of digital advertising inventory.
While it faces significant challenges, Urban One Inc. (NASDAQ:UONE) is adapting to changing market conditions through strategic plans. As it works towards deleveraging its balance sheet, having repurchased $35.5 million of its 2028 notes at a discount, we can see how the company is expected to grow soon. This makes it a top broadcasting stock to buy now.
5 hedge fund holders have long positions in the company. Renaissance Technologies is the largest hedge fund holder with a position of $464,858, as of June 30.