In a note to investors, Credit Suisse analyst Heath Terry said News Corp. (NWS-A) is their favorite name in the media sector, with Disney (DIS) being right behind them. Both are rated outperform by the firm.
"News Corp. is our favorite name due to the quality of its television and film assets, the potential for unrecognized value in its print assets, and the company's growing Internet business," Terry wrote. "Disney is also likely to continue to outperform given the strength in theme parks, cable and its leverage to the growth in online advertising."
Terry added that he expects media stocks in general to trade "in line with the market."
As far as Time Warner (TWX), Terry felt that they aren't likely to sell off any of their units any time soon; an obvious referral to nothing being done until the CEO turnover happens.
Viacom (VIA-B) is considered to lag behind the others because of its slow move to the internet, with no properties of scale under their wing; although they do have an aggressive niche strategy going on somewhat quietly behind-the-scenes, with hundreds of websites being put up by the company, through its MTV division.
I agree with Terry in his top media company picks. Those with the best international exposure, growing cross-platform strategies, along with strong TV and film assets, are those that will grow the strongest in the years ahead. Both Disney and News Corp. aggressively pursued these areas and are poised to launch off to the next level, while their competitors still struggle to get things in place for the push.
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