We recently compiled a list of the 12 Best Broadcasting Stocks to Buy Right Now. In this article, we are going to take a look at where Gray Media Inc. (NYSE:GTN) stands against the other broadcasting stocks.
The global broadcasting and cable TV market size was estimated at $356.45 billion in 2024, according to Grand View Research. It is projected to grow at a CAGR of 4% from 2025 to 2030 and reach $449.91 billion. This is driven by the increasing demand for on-demand and live content, which is fueled by the rise in digital consumption and global connectivity. Viewers seek content in high-definition, which includes news, sports, and entertainment. Rising income levels and increased television ownership in today’s emerging markets are also behind this demand. Broadcasters capitalize on these trends by offering flexible subscription models and specialized content for a broader audience base.
This industry is supported by the governments, technological advancements, and evolving consumer demands. Government initiatives, such as subsidies and investments in digital infrastructure, are expanding access to broadcasting services, particularly in underserved areas. It’s capitalizing on digital platforms, which offer streaming and hybrid models to reach diverse audiences and cater to their preferences. Technological innovations, which include 5G, cloud-based broadcasting, and AI-powered personalization, are all enhancing the viewer experience and driving demand for higher-quality content.
NewscastStudio recently reported that the dominance of mobile devices in content consumption is fundamentally reshaping the broadcasting landscape. There are 4.88 billion smartphone users globally and mobiles account for over 60% of global internet traffic. Therefore, broadcasters are prioritizing mobile-first strategies. This shift necessitates a significant adaptation, moving beyond traditional television formats. Key changes include an emphasis on vertical video formats, which mirrors the dominant style on platforms like TikTok and Instagram. Broadcasters are increasingly creating content specifically for mobile viewing by recognizing the need to optimize for smaller screens and shorter attention spans. Interactive elements like live polls, chats, and games are also being integrated to enhance viewer engagement and create the interactive nature of social media.
Production processes are now centered around mobile viewing experiences, and consider factors like background viewing and optimizing for limited bandwidth. The expansion of 5G networks is crucial for this, as it enables faster and more reliable data transmission. Advanced compression technologies are also vital for ensuring seamless streaming experiences, especially in areas with limited bandwidth. These changes reflect the need for broadcasters to be adaptable in a rapidly evolving media landscape.
The modern broadcasting environment embraces mobile-first strategies and invests in innovative technologies.
Methodology
We first sifted through ETFs, online rankings, and internet lists to compile a list of the top broadcasting stocks. We then selected the 12 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 Q3 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).
A satellite dish with a view to the night sky, preparing to receive transmissions.
Gray Media Inc. (NYSE:GTN)
Number of Hedge Fund Holders: 24
Gray Media Inc. (NYSE:GTN) is a multimedia company that owns and operates television stations and digital assets in the US. It owns Gray Digital Media, which is a digital agency that provides clients with digital marketing strategies. It also operates video production companies and studio production facilities.
Its third quarter in 2024 saw a boost in overall revenue due to its broadcasting segment. Total revenue reached $950 million, an 18% increase year-over-year. This was attributed to political advertising revenue, which contributed $173 million. The company expects its full-year political ad revenue to reach ~$500 million. Despite headwinds caused by political advertising and the shift of Southeastern Conference football games, core ad revenue (excluding political) saw a 1% year-over-year increase. This reflects the company’s success in attracting local businesses to its platforms. Its digital ad sales segment also expanded, consistently delivering double-digit growth rates and setting new records for revenue.
In January, Gray Media Inc. (NYSE:GTN) joined forces with three other major broadcasting companies (E.W. Scripps, Nexstar, and Sinclair) to launch EdgeBeam Wireless. This joint venture will use ATSC 3.0 technology to provide nationwide wireless data services. Gray Media Inc. (NYSE:GTN), along with its partners, recognizes the potential of ATSC 3.0 to offer a cost-effective and secure alternative for data delivery, particularly for applications like automotive connectivity, content delivery, and enhanced GPS. This initiative represents the company’s eagerness to grow.
Miller Value Deep Value Strategy increased its position in Gray Media Inc. (NYSE:GTN) during Q2 2024, believing it to be undervalued. The firm highlighted the company’s strong market position, robust cash flow generation, and growth initiatives. It expects significant value appreciation in the coming years. It stated the following in its Q2 2024 investor letter:
“Our two largest detractors during the quarter were Nabors Industries (NBR) and Gray Television, Inc. (NYSE:GTN), whose share prices were down 17% and 16% respectively during the quarter. We think both company’s share prices are at deep discounts to their long-term fundamental value; we have recently increased both holdings.
Gray Television remained under pressure during Q2, with ongoing marketplace concerns on the company debt leverage. Gray has limited maturities over the next 2 years and recently announced an opportunistic debt repurchase program. After a slow start to political advertising due to weaker than expected primaries, we expect to see a nice ramp in political advertising in the back half of the year. Gray’s strong local TV stations, #1 and/or #2 in 89% of their markets, has the company well positioned to achieve $500-700M in high margin political advertising in 2024. In addition, Gray has been outpacing peers in growing their core business over the past couple of years and still appear to be in the early innings of an improvement cycle. Management has recently retrained their salesforce with a greater focus on expanding their high margin digital market share over the next couple of years. In addition, ATSC 3.0 (industry new IP standard), provides opportunity for Gray to stream more content and capture new high margin digital revenue streams overtime. We see the potential for $2.5B of free cash flow generation over the next 5 years that could allow the company to rapidly de-lever their balance sheet and accrue value to the equity holder. With a greater than 80% earnings and free cash flow yield, and an attractive 6.2% dividend yield, we believe patient investors have potential to be rewarded over the coming years.”
Overall GTN ranks 5th on our list of the best broadcasting stocks to buy now. While we acknowledge the potential of GTN as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GTN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
