This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Television's Popularity Continues to Lift Media Stocks, Says UBS

NEW YORK ( TheStreet) -- Television is all the rage these days, and while many take pride in following their favorite shows ("Breaking Bad" is still a favorite from this desk), others have been investing in companies that own TV stations and produce their content.

Second-quarter earnings for media companies start in earnest next week, and as long as television operators continue to show increases for advertising sales and retransmission fees, share prices are likely to continue to "react positively," said UBS in an investor report published on Monday; the report was led by John Janedis, a U.S. entertainment stocks analyst.

That media stocks have further upside from an already impressive start to 2013 is testament to television's enduring popularity, and the ease by which shows are accessed through mobile devices.

The S&P 500 Media Index has gained 29% this year compared to the broader S&P 500, which has advanced a formidable 18%, its best start to a year since 1998.

Shares of CBS (CBS - Get Report), owner of the most popular television network, have jumped 38% this year while 21st Century Fox (FOXA - Get Report), the television and film assets of the former News Corp., has gained 33%. Time Warner (TWX - Get Report) has added 29%.

Cable-TV advertising growth "should remain strong" in the third quarter, further boosting stock prices, said the UBS analysts. CBS and Time Warner were Janedis top picks. Arguably, valuations remain attractive with large-cap media stocks trading at 9.9 times forward 12-month estimated earnings adjusting for some costs, according to UBS.

The potential for further mergers and acquisitions among television and cable-TV owners has also helped boost stock prices, UBS said. Gannett (GCI ) shares received a jolt last month after the owner of USA Today made clear that it wants to grow through television after acquiring Dallas-based Belo (BLC) for about $1.5 billion. Gannett has surged 47% in 2013.

Written by Leon Lazaroff in New York

>To contact the writer of this article, click here: LeonLazaroff.>.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
CBS $61.77 0.00%
DIS $111.55 0.67%
FOXA $33.92 0.00%
GCI $34.49 0.00%
TWX $84.45 0.00%

Markets

DOW 17,928.20 -142.20 -0.79%
S&P 500 2,089.46 -25.03 -1.18%
NASDAQ 4,939.3270 -77.6020 -1.55%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs