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May21
Jim Cramer: "I Hate Media Stocks"

While Jim Cramer recently said that he hated media stocks, he's thinking more in terms of the overall sector. In reality he does like a couple of them pretty well, specifically Disney (NYSE:DIS) and Discovery (Nasdaq:DISCA). Others he somewhat likes are Sirius Satellite Radio (Nasdaq:SIRI) and Viacom (NYSE:VIA-B).

Talking about the overall media sector, Cramer said to Hollywood Reporter, that "The world got changed by two companies. Apple (Nasdaq:AAPL) is taking away the profitability of TV, and Google (Nasdaq:GOOG) is taking it away in print. And it's never going to reverse."

Over the short term, Cramer asserts that Google is the worst of the two, being "just a parasite. It doesn't create content, it steals it, borrows it, shares it."

Concerning News Corp. (NYSE:NWS-A), he said that he didn't see the sense in acquiring the Wall Street Journal, as the business isn't growing. He said at the same time that since Murdoch took over the paper has vastly improved.

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I do think that comment is shortsighted by Cramer, as there's much more to the acquisition of Dow Jones than the Wall Street Journal print paper, or even the online Journal. Murdoch deals with time frames far different than most people in business, and I think he'll definitely come out the winner in all that. But it will definitely take someone with a long time horizon and patience to invest in the company.

For Disney, he's looking at a 13 percent growth rate over the long term, citing the power of its numerous franchises within its fold.

Time Warner (NYSE:TWX) he considers a "content company for old people." He especially doesn't like it because of its huge stable of magazines, which don't appeal as much to younger people, and thus cut back on growth prospects.

For Sirius Satellite Radio, he says that if the FCC approves of the merger between them and XM Satellite (Nasdaq:XMSR), the stock could double quickly.

While those following all of Cramer's advice in the media sector would have missed some profits from the likes of Warner Music Group (NYSE:WMG), Imax (Nasdaq:IMAX)and Tivo (Nasdaq:TIVO), which have grown nicely in the short term, even though Cramer recommended not buying them, over the long haul there is a big problem with the majority of media stocks, and it's buyer beware, especially over the short term.


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If to agree with him that consider that itself to not respect!

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