Media stocks on the move

Sirius XM biggest gainer with 258% increase

In the first half of the year, the lowliest member of The Hollywood Reporter Showbiz 50 index of stocks was also its biggest gainer: Sirius XM Radio. That stock rocketed 258%, closing Tuesday at 43 cents.

While that sort of huge six-month gain is usually relegated to risky penny stocks, media stocks in general have outperformed the broader markets in the first half of the year, with just 10 stocks among the Showbiz 50 closing lower. In the same time frame, the Dow Jones index was off 3.8%.

So media stocks, it appears, are more akin to tech stocks this year. The tech-heavy Nasdaq index is up 16.4% in the first six months.

Besides Sirius XM, some huge movers to the upside are Carmike Cinemas, up 130% to $8.38 this year, Warner Music Group (up 94% to $5.85), Imax (up 82% to $8.12), video game publisher THQ (up 71% to $7.16) and Apple (67% higher to $142.43).

Steve Birenberg of Northlake Capital said investors have been rotating to early cyclical stocks, and media qualifies because of its advertising exposure. First-quarter conference calls, he said, "pretty uniformly called for a bottoming or even slight improvement in ad trends."

Birenberg also said "balance sheet repair" helped many media stocks recover. He points out that Time Warner Cable, Comcast and CBS "were able to easily issue new debt to strong investor demand."

The biggest loser on the Showbiz 50 is Cumulus Media, and that puts traditional radio at one end of the spectrum while satellite radio is at the other end. Granted, though, Sirius XM still has a long way to go before the stock gets anywhere near a 52-week high of $2.75.

The next worst stock on the Showbiz 50 thus far is Blockbuster, which sunk 47% to 67 cents.

The other eight losers on the index are Crown Media, Time Warner Cable, Sinclair Broadcasting, Live Nation, RealNetworks, CBS, Comcast and Time Warner.

Time Warner Cable split off from Time Warner this year but, adjusted for dividends and other financial activity, both stocks are down, according to Yahoo Finance.

As a group, movie exhibition and video games have been particularly strong. In the first camp, Imax and Carmike both cracked the Top 5, while Cinemark, with a 59% gain, made it into the Top 10.

Year-to-date, the boxoffice is showing about an 11% gain, which obviously helps exhibitors. It also offsets anxiety at studios and conglomerates brought on by a declining DVD business, Birenberg said.

As for video games, beyond THQ the other stocks on the Showbiz 50 index in that industry, Activision Blizzard and Electronic Arts, boast gains of 46% and 35% on the year, respectively.
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