Commentary: Media, entertainment stocks outperform again


Hard to believe, but media and entertainment stocks just notched their second straight month of outperformance.

It's little consolation, of course, given how far they have fallen over the course of a year. But as the Dow Jones Industrial Average shed 11.7% and experienced its worst month since 1933, The Hollywood Reporter Showbiz 50 lost only 5.8% In February.

The month prior, the Dow shrunk 8.8% compared with a 2.5% contraction for the Showbiz 50.

Pundits were partially blaming GE for sinking the Dow 119 points on Friday. The parent of NBC Universal slashed its quarterly dividend for the first time in 71 years -- from 31 cents a share to just 10 cents a share -- and the stock fell 6.5%. On the month, GE was off 28%.

That would have made it the worst-performing conglomerate on the Showbiz 50 index, but it's not on the index because it's not a pure enough media company.

So the dubious honor of worst-performing conglomerate on the Showbiz 50 in February goes to CBS, which dropped 25%.

After CBS was Disney, off 19% in February

Time Warner was next, sinking18% in February to $7.63, despite bullishness in some quarters over the planned March 27 spin-off of time Warner Cable.

Miller Tabak analyst David Joyce, for example, reiterated his $12 short-term price target on Time Warner shares, and $28 target on shares of Time Warner Cable, shares of which were down 2.1% in February to $18.23

Next in line were Sony and News Corp., which both fell 14% in February. The only conglomerate moving higher in the month was Viacom, up 4% to $18.23.

Joyce also is bullish on Viacom, with a short-term target of $25 and long-term target of $35, which he figures is what the company would be worth if it were split into its various parts.

But the best performing Showbiz 50 stock was also its cheapest: Sirius XM Radio.

The troubled sat-radio firm, which dodged bankruptcy by selling a minority interest to LIberty Media in February, rose 33% to 16 cents.

The second-best performer was Activision Blizzard, home of the "Guitar Hero" franchise. The stock rose 15% in February to $10.03.

Next was Yahoo, up 13% to $13.23, with a chunk of that gain coming late in the month after new CEO Carol Bartz began shaking up her management team.

Dolby Laboratories was next, gaining 10%. The company said at the tail end of the month that CEO Bill Jasper will retire but remain a board member, and CFO Kevin Yeaman will succeed him. Founder Ray Dolby will step down as chairman but remain on the board, and Peter Gotcher will become the new chairman.

National CineMedia was the next biggest gainer. The company offered up strong guidance early in February and closed out the month with a 9% gain.

Bringing up the rear were largely broadcasters. No surprise there, since recessions are notoriously difficult on companies that rely on advertising.

Hearst-Argyle Television dropped 57% in February while Belo Corp. was off 41%.

Liberty Media and Sinclair Broadcasting were next, each falling 40%, and rounding out the Bottom 5 was video-game maker THQ, down 37% in February.

Only 13 members of the Showbiz 50 ended the month higher, but that was good enough for the index to not only outperform the Dow but also the S&P 500, down 11%, and the Nasdaq, down 7%.