Media Stocks Face Their Quarterly Exam

Quarterly earnings season accelerates next week, and that means it is time for a preview of the quarter for the Media Madness portfolio. If we get affirmative answers to the questions and issues I pose, the stocks will respond favorably to the earnings reports. As a reminder, each stock in the portfolio is a fresh-money buy at current prices.

Apple (AAPL - commentary - Cramer's Take): Macs will be good, but will they be good enough? iPods will be weak, but will they be weak enough to matter? Will iPod average selling prices offset iPod units? Will iPhone units be good enough? Is Apple feeling the impact of slowing consumer spending? Will conservative guidance disappoint the Street?

AT&T (T - commentary - Cramer's Take): AT&T shook up the market in January when it announced slower growth due to the weakening economy. Have these trends continued? Is cost-cutting from prior acquisitions coming to an end? Are wireless subscription growth and voice average revenue per user holding up?

Central European Media Enterprises (CETV - commentary - Cramer's Take): Ratings are great. Currency is extremely favorable. I expect a big positive surprise. Will anyone care? CETV provides full-year guidance on its first-quarter call. Look for revenue north of $1 billion and EBITDA north of $400 million. I believe the company will easily beat those numbers. For long-term investors, CETV is the most attractive stock in the portfolio.

Discovery Holding (DISCA - commentary - Cramer's Take): Ratings at the major networks have been weak. Will this hurt revenue growth? Some controversy has broken out over network-level margins. Will we get clarity that the upside opportunity remains? The company will also provide an update on its capital restructuring.

Grupo Televisa (TV - commentary - Cramer's Take): Slowing U.S. growth has raised fears about slowing growth in Mexico. Estimates have been falling at the critical broadcasting segment. If the company can assure investors that trends have stabilized, the stock has big upside.

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At time of publication, Birenberg was long Apple, Central European Media Enterprises, Grupo Televisa, NII Holdings, News Corp., Rogers Communications and Valuevision Media, although holdings can change at any time. CETV is by far his largest personal position.

Steven Birenberg is president and chief investment officer of Northlake Capital Management, LLC. Northlake specializes in managing equity portfolios using a combination of exchange-traded funds and special situation stocks. Birenberg appreciates your feedback; click here to send him an email.