Entrainment Stocks to Consider in 2022
Since it is a new year, there just might be a few stocks to watch closely. These are just a few of the entertainment stocks you may want to keep your eye on for the new year and consider for short term investments.
(NASDAQ:ATVI) Activision Blizzard had a year that was the complete opposite of the S&P 500, with stock value dropping 27%. The creator of video game franchises to include World of Warcraft, Diablo, and Call of Duty came across some stumbling blocks with consumers not playing video games nearly as much as when they were homebound due to COVID-19. This led to allegations of an inhospitable work environment and a number of top game designers departing from the company with updates to World of Warcraft being suspended.
Activision Blizzard definitely had its fair share of issues. They were temporary and manageable. These issues are apparent because rival gaming companies, with not nearly half the issues Activision had, included Zynga (NASDAQ:ZNGA), Take-Two Interactive (NASDAQ:TTWO), and Electronic Arts (NASDAQ:EA) also reported negative returns the year prior, with some being worse off.
The turning point may more than likely begin with Activision Blizzard’s fourth-quarter earnings report that will include holiday season sales reports. A quickly growing segment called King Entertainment represents its mobile game division. It will be very crucial, accounting for more than 30% of the revenue.
Taking into consideration if it gets its workplace in order, Activision’s bottom-line business of mobile gaming and video games may just bring it much higher. With under 20 times the free cash flow it normally generates and an earning estimate of less than 18% for this year, it offers discounted historical assessment which is keeping it a leading entertainment stock to purchase.
This video streaming leviathan (NASDAQ:NFLX) produced positive returns in 2021; however, its gain of 15% was not reportedly close to matching the broad market index. Even so, Netflix’s revenue has grown at or more than 20% per year consecutively for the past eight years. Despite the fact Wall Street expresses concerns about a possible slowdown amongst the increase in battling streaming services across the first three quarters of 2021, their revenues remain 20% higher year after year.
This highlights the power of its initial content programming. Currently with a great amount of muck in the menu, the prizes it unearths extremely outweigh the failures. Its ability to end free trials and raise prices is a testimony to a dominant industry position and goes straight to Netflix’s fundamentals.
Spending $17 billion on new material continually adds new subscribers by the millions, 213 million globally to be exact. There is currently a great amount of expansion to be sought after in new markets. It may not acquire the same rapid gains it delighted in when consumers were quarantined to their residences, but individuals are retaining their subscriptions. This is in spite of having greater away-from-home entertainment to select from.
The year prior it was up, however, Netflix continues to uphold its position upon the streaming market and it will show in its stocks.
Losing 13% of the value as the market feared sluggish growth in its Disney+ streaming service, Disney (NYSE:DIS) was the worst producing stock last year on the Dow Jones Industrial Average. Similar to Netflix, analysts were concerned following substantial gains two years in a row by pandemic lockdown, it might be slow-moving going forward.
Its advantage is the many levers it has available to pull from. With things retaining back to normal, the entertainment giant will stay on top. Long before its streaming service went active along with a number of movie studios, cruise ships, and theme parks working independently, Disney was an important entertainment company.
Media components have maintained their positioning and theme parks are once again profitable; however, COVID is still taking its toll on the cruise industry. Despite this, others like Norwegian Cruise Lines, Royal Caribbean, and Carnival are showing future bookings holding steady or surpassing pre-pandemic levels, so should Disney.
It is still on the pricey side on regular measurements of value, but Disney’s dominant positioning is keeping it on top in the entertainment industry, making it worth the cost. Taking a huge beating the year prior, it is apparent the company will come back possibly stronger than before.