Netflix Who? 3 Media Stocks That Look Like They're Back In Favor

It’s been a tumultuous year for media companies on Wall Street.

Between CBS Corporation CBS losing its CEO following accusations of sexual misconduct, consolidation in the form of Walt Disney Co DIS buying most of Twenty-First Century Fox FOXA and AT&T Inc T buying Time Warner, and the continued threat of streaming from the likes of Amazon.com Inc AMZN and Netflix, Inc NFLX, it’s no wonder many traditional media stocks have largely underperformed the S&P 500 in 2018.

But some of those stocks have begun to show life in recent weeks, at least from a trading standpoint. Over the last month several traditional media stocks have outperformed the S&P 500.

Three of these trends are outlined below using VantagePoint Software, an artificial intelligence and intermarket analysis platform that makes 1-3 day forecasts accurate up to 86 percent of the time, to show when they started and why they’ll continue.

21st Century Fox

Fox, or at least what’s left of it after it sold most of its assets to Disney earlier this year, has floundered since June when the deal officially closed. But in the last few days, the stock has had some life breathed into it. Note the bullish crossover on Sept. 24, which has carried the stock to its highest levels since July.

Image courtesy of VantagePoint

Disney

The second half 2018 should have been a victory lap for Disney following its acquisition of Fox assets, but that has not been the case. The stock fell nearly 7 percent in August-September after the company reported disappointing third quarter earnings results.

But the trend has reversed in the House Of Mouse. That was the day Disney-owned ESPN announced the network’s new over-the-top streaming service ESPN+ had surpassed the 1 million subscriber mark after just five months.

Since then it’s been nothing but upside for Disney, as the stock has regained all of those losses and then some. Traders are surely lining up for Disney’s typically strong holiday season performance.

Image courtesy of VantagePoint

Discovery

Discovery Communications DISCA has not been left out of the M&A rumor mill, as the company closed its merger with Scripps in February and has also been linked to Comcast Corporation CMCSA.

Unlike the rest of the stocks on this list, Discovery has had a strong 2018 after hitting seven-year lows last November. The most recent upswing began on Sept. 11, the day before the company confirmed its partnership with Sling TV. Since then, the stock is up 23%, and the blue predicted moving average has stayed steadily above the black simple moving average.

Image courtesy of VantagePoint

Mind you, just because the three stocks in this article have shown relative outperformance in the last few days and weeks, does not mean those trends will continue indefinitely. Prudent traders should always be mindful that stocks can reverse on a dime, so it’s always a good idea to use stops to control your downside risk.

Vantagepoint Software is a content partner of Benzinga. For a free demo click here.