The coronavirus outbreak has sent just about everyone to a screen of some sort. This means that much more media has been and will be consumed in the weeks gone by and possibly the weeks or even months ahead. Though some consumers have trimmed their budget by “cutting the cord” on cable TV, media stocks still might emerge from the coronavirus pandemic as big winners.
Roku, AT&T and Pinterest are three such stocks that have the potential to trend upward as the pandemic plays out.
2020 has the potential to be the year of the telecom giants. Aside from the increased time spent on screens due to the pandemic, this year also marks the roll out of 5G, also known as the “next generation” of communication.
AT&T provides 5G service along with a slew of additional media-related services. Though T is not a rapidly growing company, it still has considerable value and reliability, two strengths that are particularly important during this new era of uncertainty.
Consumers are willing to pay for web connectivity and wireless service even if we enter an economic depression. These facts mean T will continue to rake in the dollars and gradually expand operations in the years to come.
T’s 7% yield combined with its remarkably low forward P/E ratio of 8.94 make it quite the bargain at $28.96 per share. Furthermore, the POWR Ratings have T ranked #5 of two dozen stocks in the Telecom – Domestic industry.
Look for T to trend upward toward the average analyst price target of $33.62 in the weeks and months ahead.
Streaming video content has never been more popular or important now that more and more people are spending the majority of their time in front of screens at home for both work and entertainment. When it comes to cutting edge technology in the media space, few companies top ROKU. This is an incredibly exciting company worthy of praise for its irreverence for convention.
ROKU provides a central hub for consumers to access their favorite streaming entertainment. Though some customers buy a ROKU device, use it a few times and never return to it, this is the exception to the norm.
Advertisers are in the process of transitioning away from sporting events and other live TV to streaming services such as ROKU in response to the consumer shift away from cable toward streams. As a result, ROKU is poised to grow.
It is becoming increasingly clear customers are open minded about cutting the cord on cable and spending for streaming services such as ROKU and Netflix (NFLX). The bottom line is ROKU is currently undervalued at $116, still about $50 off from its November ’19 price of $164. ROKU has halfway decent grades in each POWR Rating, with an A Industry Rank. All in all, the POWR Ratings have ROKU ranked in the top half of the 28 stocks in the Technology – Hardware sector.
Look for ROKU to consume a larger portion of the media consumer pie during and after the pandemic, sending the stock toward TipRanks’ average analyst price target of $128.33 and possibly close to its 52-week high of $176.55.
Take a moment to consider the amount of time you have spent surfing the web since the start of the coronavirus outbreak. You have likely spent some of your web surfing time on social media.
Though PINS is not the most popular social media platform, it is gaining ground on its peers. This image-sharing site empowers users to gather links to create their own unique online pin boards tailored to their specific interests.
PINS has been oversold as investors assumed it would disproportionately suffer as a result of reductions in digital ad spending. This stance overlooks the fact that the coronavirus quarantine sent that many more new users to PINS’ website. Digital ad spending will rebound in response, helping PINS gain that much more market share.
A large part of PINS appeal is the fact that its visitors peruse the website with the aim of buying something. In other words, advertisers will gravitate toward PINS in the short-term and the long-term. Zacks ranks PINS as a “Buy. TipRanks’ average analyst price target for the stock is an impressive $22.
The moral of the PINS story is it has been oversold and undervalued, creating quite the appealing “buy the dip” opportunity. Buy PINS today and you just might watch it ascend toward its 52-week high of $36.83 by this point next year.
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T shares were trading at $29.71 per share on Thursday afternoon, up $0.12 (+0.41%). Year-to-date, T has declined -21.60%, versus a -7.78% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...
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