Media running with bulls
TW, Dis, Charter hit 52-week highs on Thurs.Several big entertainment and media stocks hit 52-week highs Thursday in the absence of big news as investors seem to have entered the third-quarter earnings and holiday-shopping season with optimism.
Among the key gainers were Time Warner Inc., whose shares hit a four-year high, the Walt Disney Co. and cable operator Charter Communications.
Overall, The Hollywood Reporter Showbiz 50 stock index gained $16.83, or 1.49%, to close at $1,143.65.
"Gas prices look better, and that boosts the consumer-spending outlook for the holiday season and in turn could bode well for advertising," media industry expert and Vogel Capital Management president Hal Vogel said. He also credited a Wall Street-wide move into big-cap stocks for the recent gains in some big media stocks. "After many years of underperformance of big-cap stocks and a focus on smaller issues, there has been a rotation into bigger (names)," which has helped lift big stock indices.
One of the beneficiaries is the world's largest media conglomerate. Shares of Time Warner Inc. went as high as $20.08 on Thursday before closing up 0.8% at $19.99. It marked the first time since 2002 that the stock broke through the $20 mark — and also closed near it.
The only news out of TW on Thursday was that its board has approved another regular quarterly dividend at the 5.5 cents-per-share payout level. The stock has of late broken out of its tight trading range as investors have started focusing on solid growth at TW Cable, which the conglomerate plans to spin off next year, and analysts have expressed hope that a new strategy at AOL will turn the online unit around.
Shares of Disney also broke through their previous 52-week high of $31.79 on Thursday, finishing the trading session up 2.5% at $31.98. The stock has been one of the year's best performers in the entertainment sector and has been at five-year highs.
Analysts have credited such factors as the leadership of CEO Robert Iger and his more aggressive push into new-media opportunities as key drivers of the stock.
The Paul Allen-controlled cable operator Charter Communications rose 12.2% to $2.12 on Thursday and went as high as $2.19 intraday, easily besting the stock's previous 52-week high of $1.99.
Charter shares have been buoyed in recent days, with analysts pointing out general investor bullishness and appetite for cable stocks, which was further elevated Thursday by Comcast Corp.'s third-quarter results and earnings call.
The Associated Press said the stock also might benefit from continuing speculation that Charter could sell its Los Angeles cable systems, with TWC a possible buyer. Such a move would help Charter to reduce its industry-leading debt load.
Also Thursday, Google Inc. continued to move closer to the $500 mark — at least in intraday trading, which various analysts have said it would reach before year's end. The stock hit a 52-week high of $491.96 before closing down slightly at $485.10.
News Corp. voting shares Thursday also closed near their 52-week high, rising 1.2% to $22.01 — just shy of the $22.04 high for the year.