15 Best Advertising Stocks to Buy According to Hedge Funds

6) Ziff Davis, Inc. (NASDAQ:ZD)

Number of Hedge Fund Holders: 19

Ziff Davis, Inc. (NASDAQ:ZD) offers computing and internet-related technology media, and marketing services. Ziff Davis, Inc. (NASDAQ:ZD)’s stock faced pressures due to missed earnings and evidence of slowing business in June. Much of the weakness came from its business-to-business tech advertising unit and its subscription business.

However, Ziff Davis, Inc. (NASDAQ:ZD) continues to navigate a challenging landscape in the tech advertising market by pursuing growth with the help of strategic acquisitions and cost management. The acquisition of CNET forms the base of this strategy, with Ziff Davis, Inc. (NASDAQ:ZD) expecting it to support its business in the latter half of 2024. Analysts believe that this acquisition is expected to act as a growth catalyst for the company’s digital advertising narrative.

While the tech advertising market has been facing pressures, Ziff Davis, Inc. (NASDAQ:ZD)’s management remains focused on a long-term strategy to consolidate budgets in this space. The company reiterated its full-year guidance for 2024 and expects additional Q4 revenue from CNET and seasonal strength. CNET brings a strong brand and established presence in the digital media space, which is expected to further enhance Ziff Davis, Inc. (NASDAQ:ZD)’s market position and advertising capabilities.

Meridian Funds, managed by ArrowMark Partners, released its third-quarter 2024 investor letter. Here is what the fund said:

“Ziff Davis, Inc. (NASDAQ:ZD) operates a leading internet and software services company through two segments: business cloud services and digital media. The stock fell in the quarter on missed earnings and evidence of slowing business in June, reversing some of the stabilization and positive momentum reported in the prior quarter. The company cited pockets of weakness in its business-to-business tech advertising unit, and its subscription business came in below expectations, largely on shifting sales bookings that impacted the timing of sales, making comparisons difficult.

On a positive note, Ziff Davis announced the acquisition of CNET, a significant media asset in technology and consumer electronics. Ziff-Davis is well-known for its ability to acquire assets and create long-term value. Selling at an attractive valuation we believe growth could reaccelerate, especially with further accretive acquisitions, and modestly trimmed our position during the period.”