Something quaint is happening in TV land. Amid all the talk
about new technologies for delivering video, it's the local broadcasters—the
companies that carry local news and sitcom reruns—that are stealing the show,
according to Barrons.
Shares of Nexstar Broadcasting Group (ticker: NXST), an
operator of 72 local TV stations, are up 254% in 2013. The surge bests even the
torrid pace of Netflix (NFLX), the leading proxy for TV's hyped future.
Sinclair Broadcast Group (SBGI), with 149 stations, is the largest of the pure-play
broadcasters; its shares are up 133%.
The party is just under way, according to Barrons. Nexstar
and Sinclair could easily gain 20% in the coming year. And the stocks could
double from there, as investors begin to recognize the considerable value tied
up in the airwaves. Spectrum is a hot commodity, as consumers pull more and
more data to their smartphones. And the broadcasters, thanks to TV's
over-the-air history, happen to control a large swath of airborne real estate.
Broadcast bulls contend that Nexstar and Sinclair's spectrum
licenses could be worth as much as the companies' entire market value today.
In the near-term, broadcasters are benefiting from an ad
recovery, just as a new revenue stream from licensing content kicks into gear.
After years of giving away their channels to cable and satellite companies, the
broadcasters have found religion when it comes to getting paid for content. And
broadcast content remains a living-room mainstay. Most top-rated shows still
originate on the broadcast dial—including popular sitcoms and big-event
programming like the Super Bowl and Academy Awards.
No comments:
Post a Comment