With Netflix In The Lead, Media Stocks Handily Beat Overall Market In 2013

Shares in the streaming video company appreciated 297.6% during the latest 12 months, well ahead of everyone in the companies we track — including media  industry giants, where CBS (+67.5%) led the pack. But you shouldn’t hear many complaints. The Dow Jones U.S. Media Index rose 12.3% in Q4, and 47% for the entire year, as investors became increasingly comfortable about the prospects for information and entertainment companies in a period of strengthening ad sales, low interest rates, and prodigious stock repurchases and dividend payments. The sector was well ahead of the benchmark Standard & Poor’s 500, which was up 9.9% in Q4 and 29.6% for the year. Big Media companies will look back at the year fondly. After CBS, the top performers were Viacom (+65.6%), Sony (+54.4%), Disney (53.4%), Time Warner (+45.8%), Discovery (+42.4%), Comcast (+39.1%), and Fox (+37.9%).  But lots of other companies did much better. Industry winners after Netflix include Best Buy (+236.5%), Pandora (+189.8%), Sinclair Broadcasting (+183.1%), DreamWorks Animation (+114.2%), and Live Nation (+112.2%). The year’s underperformers include RealD (-23.8%), Barnes & Noble (-0.9%), Apple (+5.4%), and TiVo (+6.6%).

The results for Q4 were mixed. Big Media leaders were Disney (+18.5%),  CBS (+15.6%), Comcast (+15.2%), and News Corp (+12.2%). Underperforming the S&P were Sony (-19.7%), Viacom (+4.5%), Fox (+5.0%), Time Warner (+5.9%) and Discovery (+7.1%). Elsewhere in the sector, the big winners in Q4 included several companies that had struggled for much of 2013 including Martha Stewart Living Omnimedia (+82.6% in Q4 to end the year +71.4%), World Wrestling Entertainment (+63.0% and 110.1%), AOL (+34.8% and 57.4%), Cinedigm (+34.7% and 44.3%), and Redbox owner Outerwall (+34.5% and 29.3%). Conversely, companies sagging in the last three months had fine years including game maker Electronic Arts (-10.2% in the quarter and +58.0% for the year), Lionsgate (-9.7% and +93.0%), IMAX (-2.5% and 31.1%), AMC Networks (-0.6% and +37.6%), and Charter Communications (+1.5% and +79.4%).