Dan Moskowitz: Top 10 Media Stocks for 2015

WALT DISNEY is one of the strongest brands in the world. It also possesses multiple revenue streams and pricing power. Q1 EPS jumped 23% year over year based on record revenue. When a company delivers record revenue, that trend doesn’t make a sudden U-turn. If there's going to be a turnaround for the worse, it will take time to play out, giving you time to exit your position

CBS Q4 revenue increased 3% and diluted EPS improved 8%. CBS also announced a $1 billion share buyback in the first quarter. This will significantly reduce the share count, which should improve earnings. CBS will once again have Thursday Night Football, and it will be the home of Super Bowl 50. It’s also home to regular-season NFL games, March Madness and The Masters. However, its reach goes well beyond sports

COMCAST, FY2014 revenue at Comcast Corp. (CMCSA) increased 6.4%. Operating cash flow and EPS improved 6.9% and 25%, respectively. Comcast also increased its dividend 11% and announced that $4.25 billion of its $10 billion share buyback program would take place in 2015

TWENTY-FIRST CENTURY FOX, Q2 operating income before depreciation and amortization increased 12%. Fox studios enjoyed 24 Academy Award nominations in 2015, making it the industry leader. Twenty-First Century Fox also recently created the Europe’s leading pay TV business

GOOGLEis known as more of a technology company than a media company, but its YouTube segment consumes approximately 15% of all broadband traffic in the United States and Canada (only Netflix, Inc. (NFLX) is higher at 35%). Google also makes this list because of its $62.63 billion in cash, which means it can enter any business it pleases. If it chooses to expand its media presence, then it would likely steal share from some of the current industry leaders

SPECULATIVE MEDIA STOCKS CHARTER COMMUNICATIONS, Q4 revenue jumped 9.9% at Charter Communications, Inc. (CHTR) thanks to higher customer penetration on Internet, video, and commercial businesses. Another positive is that Berkshire Hathaway Inc. (BRK.A) recently increased its position in CHTR by adding 1.2 million shares. CHTR now represents 1.35% of the fund’s portfolio. The reason CHTR is on the speculative list is a lack of profitability

DISCOVERY COMMUNICATIONS, differentiation is the key here thanks to Discovery Communications, Inc.'s (DISCA) success with docudramas. In FY2014, revenue increased 13%, adjusted earnings per diluted share improved 13%, free cash flow increased 2%, and $1.4 billion worth of stock was repurchased. The biggest risks here are a challenging U.S. market and currency headwinds. It should also be pointed out that there is an 11% short position on the stock

VIACOM, is a profitable company that pays a small dividend. On the other hand, a debt-to-equity ratio of 3.88 isn’t comforting.
Time Warner

TIME WARNER INC. has 165 channels across 200 countries. This includes HBO. In FY2014, revenue increased 3%. That’s not spectacular, but adjusted EPS jumped 18%, which now represents six consecutive years of adjusted EPS growth in the high teens. Time Warner also returned $6.6 billion to shareholders via dividends and buybacks throughout the year. Over the long haul, cable companies will have a difficult time competing against streaming services, but all is okay for right now.
Scripps Networks Interactive

AMONG SCRIPTS NETWORKS INTERACTIVE INC'S properties are Home and Garden Television, Food Network, Travel Channel, DIY Network, Cooking Channel and Great American Country. These are strong brands. Strong enough that Scripps Networks expects FY2015 revenue to increase approximately 4%. The company also expects selling, general, and administrative expenses to come in between flat and down 2%. Either way, it’s a positive when revenue is outpacing SG&A expenses. Furthermore, Scripps Networks has announced that it’s adding $1 billion to its share buyback program and increasing its dividend by 15%. The risk here is the stock’s sensitivity to broader market corrections.