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Media Stocks 2017: Amazon, Netflix, Twitter, Lionsgate, Comcast Among Biggest Gainers

The market has spoken for 2017. Looking at stock performance for the year, traditional media conglomerates can’t match the momentum behind the tech giants that are driving hard into the content production and distribution arena.

The big winners of the year among media and entertainment stocks were — no surprise — the tech giants that have become known as FAANG: Facebook, Amazon, Apple, Netflix, and Google. Netflix was the biggest gainer in percentage terms. Amazon had a banner year. Most of traditional media, not so much.

Disney once again boasts the highest share price, by a big margin, among the Hollywood studio conglomerates. But the mighty owner of Pixar, Marvel, LucasFilm, ESPN, and ABC is battling high expectations and nervousness about a changing business climate. The stock gained 3.2% for the year, after a flat performance for calendar year 2016.

21st Century Fox, on the other hand, delivered double-digit gains thanks to the inflationary effect of Disney’s surprise acquisition pact set earlier this month. Sinclair Broadcast Group and Scripps Networks Interactive also closed out the year with a double-digit bounce on the heels of M&A activity.

Comcast weathered the storm around both ends of its core businesses, cable and broadband service, and NBCUniversal’s content operations. There was no big transaction to drive shares up or down, making a 16% gain that much more respectable, coming off of 2016’s 22.4% rise.

Discovery, the buyer of Scripps Networks, had the roughest year among Big Media with an 18% drop. Concerns about the fate of its pure-play cable programming operations, as consumers embrace lower-cost streaming and skinny bundle options, have been a dark cloud over the shares.

Longtime Discovery investor John Malone demonstrated his faith in the company earlier this month by shelling out more than $6.5 million to scoop up more shares. The famed media mogul told CNBC in November that Discovery’s slide marked a “dirt cheap” buying opportunity, given the benefits on the horizon of the Scripps Networks merger.

AMC Networks has been facing the same investor jitters as Discovery. But the home of “The Walking Dead” managed a slight gain for the year, which marked a big improvement over 2016’s 30% plunge.

AT&T, CBS Corp., and Time Warner were down for the year by single digits. Time Warner and CBS Corp. had high benchmarks from 2016 when they were Big Media’s top two gainers. AT&T is handicapped by the uncertainty surrounding its core wireless business and the effort to scoop up Time Warner following the Justice Department’s lawsuit to block the union.

Viacom logged another down year after a whirlwind of restructuring under new CEO Bob Bakish. Anything would have been an improvement over the corporate warfare between Sumner Redstone and former CEO Philippe Dauman that rocked the company in 2016. But investors aren’t sold yet on the new vision. Viacom has had a late-year bounce on the speculation about media M&A heating up in the wake of the Disney-Fox pact.

Still, some question whether a flurry of consolidation is the answer for traditional players in a fast-changing marketplace. Charter Communications and Verizon are among the heavyweights that have been kicking tires on media- and content-centric deals, but have yet to pull the trigger.

“M&A is not a substitute for strategy,” Craig Moffett, veteran media analyst with MoffettNathanson, told Bloomberg TV earlier this month. “M&A has to be in service of a strategy.”

If there’s a strategy that investors can get behind, it’s the path blazed by Amazon. The digital behemoth topped the $1,000-per-share mark in September for the first time since the company went public in 1997.  
The company’s shares have been on a steady upswing since mid-October, right around the time it shook up its entertainment division with the ouster of Amazon Studios president Roy Price.

But probably more significant for the stock was a raft of positive economic indicators that hit around that time. What’s good for consumer confidence is good for Amazon. The company’s $13.7 billion purchase of grocery store chain Whole Foods, unveiled in June, promises to extend its influence over retail activity all the way into the organic fruit and vegetable aisle.

Netflix remained a Wall Street darling in 2017. The company’s global subscriber growth stats were impressive enough to calm concerns about the torrid pace of its spending on original content — a gold rush that has raised the bar for talent costs across the industry.

After generating mostly disappointing news for investors since its 2013 IPO, Twitter shares had a good run in 2017 with a nearly 50% gain. Observers attribute the buoyancy to improved financial performance under CEO Jack Dorsey, who has promised the company will turn its first profit in Q4 2017. There’s also anticipation that Twitter will eventually combine with a larger platform a la Google, Microsoft, or Amazon.

Here’s a detailed look at the 2017 performance of 20 major players in the media and entertainment sector.

Netflix
Closing price Jan. 3: $127.49
Closing price Dec. 29: $191.96
52-week range: $123.60-$204.38
% gain in 2017: +55%

Amazon
Closing price Jan. 3: $753.67
Closing price Dec. 29: $1,169.47
52-week range: $747.70-$1,213.41
% gain in 2017: +54.5%

Facebook
Closing price Jan. 3: $X116.86
Closing price Dec. 29: $176.46
52-week range: $114.77-$184.25
% gain in 2017: +53.4%

Twitter
Closing price Jan. 3: $16.44
Closing price Dec. 29: $24.01
52-week range: $14.12-$25.56
% gain in 2017: +47.3%

Apple
Closing price Jan. 3: $116.15
Closing price Dec. 29: $169.23
52-week range: $114.76-$177.20
% gain in 2017: + 46.1%

Google
Closing price Jan. 3: $786.14
Closing price Dec. 29: $1046.40
52-week range: $770.41-$1078.49
% gain in 2017: +33%

Lionsgate
Closing price Jan. 3: $27.46
Closing price Dec. 29: $33.81
52-week range: $24.27-34.75
% gain in 2017: +25.7%

21st Century Fox
Closing price Jan. 3: $28
Closing price Dec. 29: $34.12
52-week range: $24.30-$35.34
% gain in 2017: + 25.2%

Scripps Networks Interactive
Closing price Jan. 3: $72.37
Closing price Dec. 29: $85.38
52-week range: $64.87-$88.45
% gain in 2017: +19.6%

Charter Communications
Closing price Jan. 3: $285.77
Closing price Dec. 29: $335.96
52-week range: $282.54-$408.83
% gain in 2017: +16.7%

Comcast
Closing price Jan. 3: $34.53
Closing price Dec. 29: $40.05
52-week range: $34.12-$42.18
% gain in 2017: +16%

Sinclair Broadcast Group
Closing price Jan. 3: $33.85
Closing price Dec. 29: $37.85
52-week range: $26.70-$43.05
% gain in 2017: +13.5%

AMC Networks
Closing price Jan. 3: $53.55
Closing price Dec. 29: $54.08
52-week range: $46.89-$67.61
% gain in 2017: +3.3%

Disney
Closing price Jan. 3: $106.08
Closing price Dec. 29: $107.51
52-week range: $96.20-$116.10
% gain in 2017: +3.2%

Verizon

Closing price Jan. 3: $54.58
Closing price Dec. 29: $52.93
52-week range: $42.80-$54.83
% loss in 2017: -0.8

Time Warner

Closing price Jan. 3: $96.76
Closing price Dec. 29: $91.47
52-week range: $85.88-$103.90
% loss in 2017: -5.2%

CBS Corp.
Closing price Jan. 3: $64.39
Closing price Dec. 29: $59
52-week range: $52.75-$70.10
% loss in 2017: -7.2%

AT&T

Closing price Jan. 3: $43.02
Closing price Dec. 29: $38.88
52-week range: $32.55-$43.03
% loss in 2017: -8.6%

Viacom

Closing price Jan. 3: $35.90
Closing price Dec. 29: $30.81
52-week range: $22.13-$46.72
% loss in 2017: -12.2%

Discovery Communications
Closing price Jan. 3: $27.96
Closing price Dec. 29: $22.38
52-week range: $15.99-30.25
% loss in 2017: -18.3%

(Pictured: Disney CEO Bob Iger and 21st Century Fox chairman Rupert Murdoch)

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