2. Interpublic Group of Companies, Inc. (NYSE:IPG)
Short Interest: 6.69%
Number of Hedge Fund Holders: 30
The Interpublic Group of Companies (NYSE:IPG) is a global marketing services and advertising company specializing in data, insights, media, creative and production, healthcare marketing and communications, and digital commerce. It operates through three segments: Integrated Advertising & Creativity Led Solutions (IA&C), Media, Data & Engagement Solutions (MD&E), and Specialized Communications & Experiential Solutions (SC&E).
The MD&E segment provides digital services and products, global media and communications services, advertising and marketing technology, data management and analytics, e-commerce services, strategic consulting, and digital brand experience. This segment runs Acxiom and IPG Mediabrands. The IA&C segment, in contrast, provides advertising, strategic consulting, and corporate and brand identity services. The SC&E segment covers global public relations and other specialized communications services, sports, entertainment marketing, events, and strategic consulting.
The company is backed by solid financials and reported strong second-quarter results. Organic growth in Q2 fiscal 2024 before billable expenses rose to 1.7%, bringing total organic growth in the first half of 2024 to 1.5%. Central America, Latin America, and the UK experienced significant growth, followed by increased growth in markets in the US and other parts of the world. In addition, each of the company’s three operating systems grew organically as compared to the same period in 2023.
IPG Mediabrands and IPG Health are some of the company’s key drivers of growth. In addition, Golin, Acxiom, and Deutsch LA also saw solid quarterly growth. The company expects to continue its growth trajectory, anticipating the most consistent and strongest business growth areas to be tech and data-driven media offerings, PR and experiential marketing capabilities, and specialist healthcare marketing expertise. Growth in two of its largest and most successful businesses, IPG Mediabrands and IPG Health, is driven by the specialized high-value services the company provides to marketers, earning it a competitive edge. It reaches audiences more precisely and relies on more technical skill sets to lead to outcomes.
The company expects Generative AI to further enhance its broad range of offerings. It is collaborating with Amazon, Adobe, Getty Images, Blackbird.AI, Microsoft, Google, and other significant industry players to gain enterprise access to large language models and advanced AI tools. These resources are being increasingly implemented in all sectors of the company’s business segments, including creative ideation in production, experiential communications practices, insight generation, and advanced media and precision marketing capabilities. Interpublic Group of Companies (NYSE:IPG) takes the second spot on our list of the worst advertising stocks to buy as per short sellers.
