Are These Top Streaming Stocks On Your April Watchlist?
Among other things, 2020 has been a banner year for streaming stocks in the stock market. If you don’t agree, ask yourself, do you love paying expensive bills to gain access to hundreds of channels, music videos, and commercials? If your answer is ‘No’, then perhaps you are like millions of Americans, who are switching to streaming services that are more suitable for your needs and most importantly, affordable.
When it comes to looking for top streaming stocks to buy, Netflix (NASDAQ: NFLX) is almost on top of every investor’s list. In another sign of Netflix’s growing dominance, the company has just signed a five-year deal with Sony Pictures Entertainment. This would allow Netflix to have exclusive access to Sony’s films once they leave theaters.
“This not only allows us to bring Sony’s impressive slate of beloved film franchises and new I.P. to Netflix in the U.S., but it also establishes a new source of first-run films for Netflix movie lovers worldwide,” Netflix’s head of global films, Scott Stuber, said in a statement on Thursday.
Streaming Stocks Have Posted Gains Previously, Can They Do It Again?
With the ramp-up of vaccinations in the U.S. and globally, many investors would think twice before buying top streaming stocks. I get that and that’s a normal cause for concern. But what you may not know is, many households continue to subscribe to streaming platforms. Some are even subscribing to a few at the same time.
Now, the U.S’s cord-cutting movement is marching on. In the fourth quarter of 2020, about 1.2 million U.S. consumers cut the cord. A larger number signed up for streaming. With the plethora of streaming services we have in the market, would it make sense to put up a list of top streaming stocks to buy right now?
Top Streaming Stocks To Watch In April 2021
- fuboTV (NYSE: FUBO)
- Spotify Technology (NYSE: SPOT)
- Walt Disney (NYSE: DIS)
- Magnite Inc. (NASDAQ: MGNI)
First up the list is a sports-centric streaming platform fuboTV. This emerging, hypergrowth live TV streaming company whose platform is the closest analog to cable TV today could be the best pure-play in the sports live streaming market. However, it didn’t have a smooth first quarter. In fact, FUBO stock surrendered more than half of its value in just the past two months. On the surface, it seems like fuboTV had a bad quarterly report that triggered the massive sell-off. But that’s really not the case here.
The live TV streaming company just happened to be caught up together with the sell-off of hyper-growth stocks. With analysts giving price targets on both extreme ends, it does confuse investors on where FUBO stock is heading. But things are clearing up. That’s because fuboTV has secured exclusive rights to the Qatar World Cup 2022 Qualifying matches of the South American Football Confederation.
Under the rights agreement, fuboTV has the exclusive OTT live streaming rights only for the remaining 70 matches, including the qualifiers. Should its bet pay off with the rights to Qatar World Cup, it should help with retention in an industry where churn is higher than it should be. With such an exciting development, would you bet on FUBO stock today?
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Next up, we have leading audio streaming company Spotify. Of course, the largest audio streaming platform may not directly benefit from the cord-cutting phenomenon. But it surely helps clear some space where you used to store all the CDs. Spotify offers music streaming services to 345 million listeners globally and generated $9.3 billion in advertising and subscription revenues in 2020, up 16.5% from the year before. No doubt, this “access-based” model continues to benefit Spotify which boasts over 155 million paid subscribers.
As Spotify amasses a larger user base each year, its leverage with rights holders increases. That said, artists may consider taking lower distribution fees in exchange for better promotion on Spotify’s highly followed playlists. This certainly bodes well for SPOT stock.
Recall that Spotify has made almost $1 billion worth of investments into the podcasting space. And podcasting is growing fast. While the exact profit margins are yet to be disclosed, it’s likely that they’re more favorable than Spotify’s current music-streaming business. With all that in mind, would you consider adding SPOT stock to your watchlist?
When it comes to entertainment, Walt Disney is surely a name that you can’t miss. From its timeless classics turned theme parks to its massive portfolio of legendary IPs, the company has plenty to offer. With the strong uptick in vaccination rate in the U.S., investors are increasingly optimistic with DIS stock as the theme parks may reopen sooner than consensus estimates.
However, we can’t ignore the fact that the recent rally in DIS Stock was driven by a strong performance of its streaming business, Disney+. After adapting its massive media portfolio to fit the streaming mold, Disney continues to make it big with homebound consumers.
Disney+’s ability to boast a total global subscriber count of 100 million subscribers is something worth cheering on. To put things in perspective, Netflix achieved a subscriber account of 200 million after a decade of operations. With Disney+ continuing to grow at breakneck speeds and rolling out its streaming services to other parts of the globe, subscriber figures could continue to climb. However, the real question here is, will DIS stock continue its upward trajectory over the coming weeks, or will it see a correction?
I know what you are thinking, Magnite isn’t exactly a streaming stock. But with the seismic shift we see in ad spending, Magnite is definitely worth a closer look. It is the world’s largest independent sell-side advertising platform which operates across numerous channels and formats, including ads on streaming TV. For those unfamiliar, Magnite is the result of a merger between digital advertising company Rubicon Project and software company Telaria.
Of course, the recent performance of MGNI stock may deter some investors from getting on board. The company’s stock price has shed around 40% in the past two months alone. As nothing has changed fundamentally since then, the recent dip provides a nice set-up for investors to buy at discount. The pandemic has dramatically pushed up demand for programmatic advertising. This secular tailwind certainly bodes well for MGNI stock.
According to Emarketer, the programmatic advertising market could be worth $96.6 billion by 2022. That is 47% higher than the $65.7 billion figure in 2020. With the long-term risk reward proposition seemingly highly attractive, will you consider buying MGNI stock today?