Media Stocks Poised for a Surge as Election Heats Up
With the 2024 presidential race tightening, CNBC’s Jim Cramer has identified three media stocks that could see significant gains in the coming months. Cramer argues that the increased political competition will lead to a surge in viewership and advertising revenue, particularly for news outlets and broadcasters heavily involved in election coverage. This surge in activity could translate to substantial profits for these companies. He highlighted Fox Corporation, The New York Times and Nexstar Media Group, as potential beneficiaries of this heightened political engagement.
Key Takeaways:
- Fox Corporation: Cramer believes Fox’s live programming, including sports and news, will attract more viewers during this election cycle. Fox News in particular, is expected to see a major boost in viewership as the election approaches.
- The New York Times: Cramer sees a close election or a Trump victory as a positive for the New York Times. He points to the increased news engagement and subscriber growth the Times experienced during the 2016 election.
- Nexstar Media Group: Cramer sees Nexstar, which owns numerous local TV stations, as a potential "trade" rather than a long-term investment. These stations are likely to benefit from increased political ad spending in the final months leading up to the election.
The Election’s Impact on Media
The 2024 election is already shaping up to be a highly contested affair, with both parties gearing up for a fierce battle for control of the White House. This intense political environment is expected to drive increased viewership and ad spending for media outlets, particularly those heavily involved in election coverage.
Fox Corporation: A Focus on Sports and News
Fox Corporation, the parent company of Fox News, is poised to benefit from the upcoming election. Cramer believes the company’s strong lineup of live programming, including sports and news, will attract a large audience. Fox News, in particular, is likely to see a significant boost in viewership as the election approaches. Its strong coverage of political events and its established reputation for providing conservative viewpoints will likely resonate with viewers interested in election news.
The New York Times: A Potential Beneficiary of High-Stakes Elections
Cramer suggests that a close election, or even a victory for Donald Trump, could benefit The New York Times. He argues that the former president drove a significant increase in news engagement and helped fuel the Times’ subscriber growth in the years leading up to the 2020 election.
The heightened political environment of the 2024 election, with its emphasis on accountability, investigative journalism, and deep political analysis, is expected to further boost the Times’ subscriber base and attract advertisers eager to reach an engaged and politically aware audience.
Nexstar Media Group: A Short-Term Play on Political Ads
Nexstar Media Group, a major local television broadcaster, is another stock that could see a bump due to the election. The company owns a large number of local TV stations, which could benefit from increased political ad spending as candidates and super PACs vie for attention in battleground states.
However, Cramer sees Nexstar as more of a short-term "trade" than a long-term investment. The company’s reliance on local advertising makes it vulnerable to economic downturns and the ongoing shift in viewership towards digital platforms. While political ad spending is likely to increase the company’s revenue in the short term, Nexstar’s long-term prospects remain uncertain as the TV industry continues to evolve.
The Power of Expectations
While the polling data may suggest a tight race, Cramer emphasizes that Wall Street is an expectations machine. Investor sentiment and market activity are often driven by anticipation of future events rather than the reality of current events.
The increasing speculation and heightened focus on the 2024 election could create a climate of heightened investor optimism surrounding the media companies mentioned above. This optimism, driven by expectations of increased viewership, ad revenue, and potential political news cycles, could translate to significant share price gains for these companies, regardless of the final election outcome.
Conclusion
The 2024 presidential election promises to be a high-stakes affair that will have significant impact on the media landscape. While the long-term outlook for some media companies remains uncertain as viewers continue to shift to digital platforms, the upcoming election could present a unique opportunity for investors seeking short-term gains. Fox Corporation, The New York Times, and Nexstar Media Group are all positioned to benefit from the increased political engagement and ad spending that are expected to accompany this fiercely contested election.
