Best stocks to invest in –
The television industry, to say the least, is very large. It spans from cable providers to programming networks to technologies intended to improve the television experience. Long are the of the basic cable package that only including ESPN, TNT, and Comedy Central – let alone the rabbit ears sitting atop the Zenith where you may get a static free image of network television series like The Tonight Show Starring Johnny Carson, The Rockford File, or M*A*S*H.
The television industry is perpetually evolving in this instant-access , instant-gratification, and binge-watching society – especially when one of the most popular networks is subscription and streaming based, and void of a designated channel number (also read: Netflix May Want to Stay Away From Original Films).
In any event, let’s examine a few television related stocks that you may want to both add and remove from your portfolio.
CBS Corp. (CBS) – Sell
CBS, or as the three largest US markets (New York, Chicago, Los Angeles) call it “Channel 2,” is known for its broad reaching comedies, amazing races, and reimagining the lives of crime scene investigators. The network currently holds a Zacks Rank #4 (Sell) and is ranked 26th out of 29 companies our Broadcast Radio/TV industry.
Earnings have not shown any signs of growth despite not missing any of the last 10 estimates. With that being said, however, CBS has only outperformed marginally, posting EPS figures between $0.73 and $0.78 consistency.
CBS has missed revenue estimates the past 2 quarters, posting $3.219 billion for their 2nd-quarter and $3.5 billion for their 1st-quarter (please read CBS Beats on Earnings, Misses on Revenues & CBS Corporation Beats on Q1 Earnings, Revenues Miss for more details). If history continues to repeat itself, CBS may be in for more revenue declines.
TiVo (TIVO) – Sell
If you owned a TiVo in the early 2000s, it is safe to say that you had the coolest home in the neighborhood. The concept of no longer having to set the VCR and purchase blank tapes to record 1 episode of Friends was revolutionary at the time. TiVo was the first popular DVR of its time. Now with cable and satellite providers offering their own DVRs, the TiVo has become a piece of 2000s Americana.
TiVo currently holds a Zacks Rank #4 (Sell), compared to lasts weeks Zacks Rank #3 (Hold), and is ranked 13th out of 15 companies in our Cable TV industry.
The company reported a $0.09 EPS for its most recent earnings period, which met our estimate of the same value. The PE ratio for TiVo is 27.67, which is not ideal for a stock that has a market price of $9.27 per share. TiVo’s next earnings report is going to have to exponentially outperform our estimates before we begin to reconsider its ranking.
Cable One, Inc. (CABO) – Buy
Cable One is a Phoenix headquartered cable company that provides internet, cable television and telephone service primarily in the United States. The Company holds a Zacks Rank #1 (Strong Buy) and is ranked 1st out of 15 companies in our Cable TV industry.
According to their latest earnings report, residential services revenues were $74.5 million, an increase of 12.7% as compared to the prior-year period, and business services revenues were $21.9 million, an increase of 16.3% as compared to the prior-year period.
Cable One also outperformed its earnings estimate by 5.46%, reporting a $3.67 EPS. The latest earnings report is the company’s first, and with its continued growth, may very well outperform the next earnings estimate of $4.34 per share.
AMC Networks (AMCX) – Buy
AMC is the network with the most popular television program – The Walking Dead – and has aired two most the most culturally relevant programs of, at least, this decade – Mad Men & Breaking Bad. Without the success of these 3 series, AMC would most likely still be an irrelevant cable channel that only played reruns of the movies FX, TNT, and USA rejected.
AMC has a Zacks Rank #1 (Strong Buy) and is ranked 1st of 29 companies in the Broadcast Radio/TV industry. The company has a strong PE ratio of 13.86 as well.
Over the last 5 earnings period, AMC has outperformed the estimates, increasing its surprise percentage each time. AMC most recent EPS was $1.23, outperforming the estimate by over 26%.
Do not be surprised if AMC outperforms on earnings over the next two quarters – The Walking Dead is currently airing its 6th season and ratings are always high. More viewers translate to more eyeballs watching advertisements. Another successful original program would not hurt either.
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CBS CORP (CBS): Free Stock Analysis Report
TIVO INC (TIVO): Free Stock Analysis Report
AMC NETWORKS- A (AMCX): Free Stock Analysis Report
CABLE ONE INC (CABO): Free Stock Analysis Report
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