The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.
“Media” is a fairly all-encompassing term now, both on Main Street and Wall Street. On Main Street, the term could refer to the traditional broadcast and print mediums, or content consumed online or via social platforms. On Wall Street, “media stocks” encompass a wide swath of companies with exposure to communications, e-commerce, hardware, software, video games, telecom, and any number of other verticals.
Despite the multifarious nature of the contemporary media landscape, the trend among these content conglomerates is no less real. Take the performance of the Direxion Daily Communication Services Index Bull 3X Shares TAWK, which is higher by more than 100% since April.
The diversity of this ecosystem represents one of the industry’s main appeals. One segment that has recently had a chance to shine is video game publishing, with companies like Activision Blizzard, Inc. ATVI, Electronic Arts Inc. EA both posting new 52-week highs in May on the back of strong quarterly earnings.
One particular standout in the industry, and Take-Two Interactive Software, Inc. TTWO, managed to push to new all-time highs in the month after the company blew past analyst’s bottom-line expectations by nearly 70% due to strong sales among their core franchises.
The healthy performance of more traditional media outlets like Fox Corporation FOXA and News Corporation NWSA, which rose above the March lows by 30% and 50% respectively, also buoyed the fund’s performance.
Also among the fund’s standout performers are the telecom conglomerates like Comcast Corporation CMCSA, up 21% since the start of April, and ViacomCBS Inc. VIAC, up by 75% in that span.
Surprisingly, two of the less thriving companies of this contingent, namely AT&T Inc. T and The Walt Disney Company DIS, have failed to rebound quite as enthusiastically from their recent lows. It may be a coincidence that both companies launched their respective streaming services in the past few months, entering an already crowded market populated by companies with a better grasp of the unique landscape of online entertainment.
Streaming remains the major theme in the modern media landscape, with Netflix, Inc. NFLX remaining the leader in the field. The stock has managed to break out to new all-time highs on the back of a strong quarterly report that saw it add 15 million new subscribers through the first quarter of 2020.
And, while not exclusively a content streaming service, shares of Amazon.com, Inc. AMZN has also climbed substantially over the past two months thanks to a 28% growth in its prime subscription revenue. Since the start of April, Amazon shares have risen by 55% and have crossed $3,000 for the first time.
For the moment, the media landscape has been able to successfully capitalize on the new reality of social distancing. And while the U.S. and the wider world begin to regain some semblance of life before the pandemic, entertainment will likely continue to be a hot commodity in the face of a new and uncertain world.
Source: Direxion. For the funds’ standardized and most recent month-end performance click here.
The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate. An investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted.
Short-term performance, in particular, is not a good indication of the fund’s future performance, and an investment should not be made based solely on returns. Because of ongoing market volatility, fund performance may be subject to substantial short-term changes.
These leveraged ETFs seek investment results that are 300% of the return of its benchmark index for a single day. Investing in a Direxion Shares ETF may be more volatile than investing in broadly diversified funds. The use of leverage by an ETF increases the risk to the ETF. The Direxion Shares ETFs are not suitable for all investors and should be utilized only by sophisticated investors who understand leverage risk, consequences of seeking daily leveraged investment results and intend to actively monitor and manage their investment.
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Market Disruptions Resulting from COVID-19. The outbreak of COVID-19 has negatively affected the worldwide economy, individual countries, individual companies and the market in general. The future impact of COVID-19 is currently unknown, and it may exacerbate other risks that apply to the Fund.
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The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.
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