Most Big Entertainment Stocks Outperformed the Broader Stock Market in 2010

4:36 PM PST 12/31/2010 by Georg Szalai
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CBS Corp. and Viacom shares lead the conglomerate pack, while News Corp. lags its peers, and Netflix is the year’s biggest Hollywood gainer.

NEW YORK -- Amid an economic and advertising recovery, 2010 was a good year for most big media and entertainment stocks, whose gains in most cases were in the double-digit percentage range and often outperformed the broad-based S&P 500 stock index. 

That was particularly true for shares of CBS Corp. Their more than 35% gain to $19.05 as of Friday’s close to the year exceeded the growth of its big-media peers and brought the shares close to their 52-week high of $19.65. Including dividends, the return for CBS shareholders was even higher. 

A close second among entertainment conglomerates: Viacom with a stock gain of 33% in 2010. Advertising improvements at both Sumner Redstone-controlled companies along with CBS’ focus on developing new revenue streams, such as retransmission consent payments, helped boost the companies’ fortunes.

Other sector biggies can also look back at a year of stock gains. Sony Corp. shares jumped 23% in 2010, Walt Disney’s stock saw a 16% boost, and Time Warner’s stock rose more than 10%. News Corp. was the weakest big entertainment performer of 2010 as its stock eked out only a 3.1% gain. 

Disney remained the entertainment giant with the largest market value at the end of 2010 with $71 billion, according to Bloomberg data, followed by News Corp., Sony Corp. and Time Warner, which all finished the year in the $35 billion-$40 billion range.

The 2010 stock performance of all those entertainment biggies were easily trumped, though, by the 219% gain in shares of Netflix, which attracted investor interest and confidence with its transformation into a key online video player that has in some cases led to concerns among the entertainment establishment. The red-hot stock at one point even exceeded $209 during the past year and ended 2010 at $175.70.

The low-trading Sirius XM Radio and John Malone’s Liberty Capital were also big 2010 winners with stock gains of 172% and 166%, respectively. 

The weakest 2010 stock performers among major Hollywood names as of Thursday were DreamWorks Animation, which has lost 26% of its value since the end of 2009 amid some box-office results that were weaker than Wall Street had hoped, and video rental firm Blockbuster, which had to file for a bankruptcy restructuring amid continued sluggishness of its business and has remained a penny stock. In sharp contrast to competitor Netflix, Blockbuster's class A shares declined 76%, and its class B shares fell 88% in 2010. 

Internet giant Google had a rare down year for its stock, which fell 4.2% in 2010.

But fellow tech giant Apple became the second-most valuable U.S. company behind Exxon Mobil this year by overtaking Microsoft, and its rose more than 50% in 2010. As of Friday’s market close, Apple’s market capitalization stood at $295.9 billion, compared to Exxon’s $368.7 billion and Microsoft’s $238.8 billion. 

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