We recently published a list of 7 Best Streaming and TV Stocks To Invest In. In this article, we are going to take a look at where Comcast Corporation (NASDAQ:CMCSA) stands against other best streaming and TV stocks to invest in.
Consumer Behaviour Around Streaming Choices
Almost all streaming services hiked up their rates and drove subscription prices high in 2023. However, cost is not the biggest factor for consumers while they stream. As of today, the price of streaming services doesn’t affect loyalty to an entertainment provider as it did in the past. Amdocs’ “The New Streamer 2024” report revealed that consumers are expecting improved experiences with rising costs. According to consumers, original content is the top feature that makes a subscription worthy. Other leading factors include access to older titles, new content every few weeks, and being able to watch anywhere.
Trends Shaping the Streaming Industry
Forbes reported that streamers have been victims of long-term challenges related to profitability and subscriber growth. To counter these issues while catering to evolving consumer demands, streamers are opting for ad-supported plans. With almost half of the younger generation open to seeing more ads, this is a potential way to boost revenue.
Streamers are also trying to score exclusive agreements and partnerships with sports leagues as live sports has become a hot commodity in streaming. Simultaneously, the cost of original content comes at reduced profitability. Against this, the potential solution is a consolidation of streaming platforms to allow access to deeper libraries of content for consumers without compromising on their priority of having original content on their plate. Additionally, cloud gaming is being integrated into streaming services considering 70% of Gen Z appears to be interested in it.
On October 18, Ben Silverman, Propagate Content Chairman & Co-CEO, appeared on CNBC giving examples of the aforementioned streaming industry trends. Commenting on the robust Q3 earnings for streaming giant Netflix, he said that its success would lead to more consolidation among the traditional media players in the smaller streamer space. The company is increasingly investing in original content, sports content, and gaming, something that will continue to reward the company as it expands its profits as well as businesses. While it has the money from its streaming business to make those investments back into streaming, many players in the streaming space do not have the same capabilities. Comcast also has the ability to sell a lot of WiFi and has many other businesses that can drive investment in the content business. He mentioned the telecommunications and media firm’s acquisition of NBCUniversal becoming an engine for the whole company. In the views of Silverman, more troubled are the companies that are pure-play so they need to either consolidate to get to scale or be acquired by the bigger players in the future.
Additionally, Silverman emphasized how sports acquisitions are the key drivers to advertising and not just the drivers in the ability to scale an audience at once. For instance, The streaming giant will be live-streaming two of the 2024 season’s NFL games on Christmas Day. Previously in July, NBCUniversal and the NBA announced an 11-year agreement for NBC, Peacock, USA Network, Sky Sports, and Telemundo to present NBA and WNBA regular-season and playoff games starting in the 2025-26 season.
Our Methodology:
In order to compile a list of the 7 best streaming and TV stocks to invest in, we sifted through ETFs, the Yahoo Finance stock screener, the Finviz stock screener, and online rankings to create an initial list of stocks. Moving on, we shortlisted the top 7 stocks from our list which had the highest number of hedge fund holders. The 7 best streaming and TV stocks to invest in have been arranged in ascending order of their hedge fund holders, as of Q2 2024.
At Insider Monkey we are obsessed with 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).
A couple watching their favorite show on TV, enjoying the entertainment network service.
Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fun Holders: 61
Comcast Corporation (NASDAQ:CMCSA) is a global media and technology company. The firm operates with two primary businesses, Content & Experiences and Connectivity & Platforms. While the firm produces, distributes, and streams leading entertainment, sports, and news through its known brands, it also delivers world-class broadband, wireless, and video through Xfinity, Comcast Business, and Sky.
Comcast Corporation (NASDAQ:CMCSA) is a scaled leader with top brands in very large and profitable markets. It has the most beloved brands and networks in the media industry and brings its expansive portfolio of content to viewers worldwide. In TV and streaming, the firm has NBC, Telemundo, Peacock, NBC Sports, Sky Sports, and NBC Olympics to offer. NBCUniversal reaches more than 100 million US households, almost 80% of the population every quarter with its content.
For the second quarter, Comcast expanded its adjusted EBITDA margin across Connectivity & Platforms to a record-high 41.9%. Adjusted EBITDA for Content & Experiences decreased due to declines in Theme Parks and Studios, partially offset by growth at Media. Media Adjusted EBITDA increased 9.0% to $1.4 billion as a result of Peacock delivering the best year-over-year improvement in adjusted EBITDA for any quarter since its launch in 2020. Peacock Revenue increased 28% to $1.0 billion.
In conclusion, Comcast Corporation (NASDAQ:CMCSA) has a scaled and strong domestic network as a major differentiator in addition to its robust businesses. As of Q2, the stock is held by 61 hedge funds.
Overall, CMCSA ranks 4th on our list of best streaming and TV stocks to invest in. While we acknowledge the potential of CMCSA as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than CMCSA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.