Most Big Entertainment Stocks Outperformed the Broader Stock Market in 2010
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.