Invest With Companies Getting the Trends Right

In many industries, several companies will compete for leadership. It can change over time, particularly if market conditions provide unusual opportunities.

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  • The past few years has seen wild swings in a number of sectors. Tech stocks soared during the pandemic amid the rise for remote work and contactless payments. Then tech stocks came back down, as their valuations were wildly expensive when interest rates started to rise.

    The media has been on a similar loop. Investors loved any company offering streaming services during the pandemic, only to go sour on those trades in the last year.

    Media firms offering a more traditional asset mix, such as Comcast (CMCSA), have been a winner instead.

    Most recently, the company beat on earnings, thanks to the strength of studio offerings such as the Super Mario Brothers movie, as well as price increases in general.

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  • That’s sent shares to a 52-week high while other media companies have struggled.

    Action to take: Even with their rally this year, Comcast is valued at just 12 times forward earnings. And the company pays a 2.7 percent dividend yield, with some modest growth in that payout in recent years. That makes for a buy now, or on any drop.

    For traders, the current uptrend is likely continue. The October $47.50 calls, last going for about $0.86, could see mid-double-digit returns in the months ahead.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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