CNBC’s Jim Cramer said the stay-at-home games fell on Monday and investors can expect to find opportunities to buy.
He recommended investors “buy them gradually into weakness” and cited cable cutting as “a strong long-term issue”.
“People dumped their cable subscriptions to web-based video services long before the pandemic.”Bad money“Host said.
The invention of the internet disrupted just about every industry, and the media business has seen some of the biggest overhauls. about 25 million American households have canceled the number of cable television subscriptions since 2012. That number is expected to double over the next five years, resulting in a projected loss of $ 25 billion in cable television subscription income and related advertising expenses.
By comparison, Disney announced in August that Disney +, the entertainment giant’s streaming offering, had built a subscriber base of more than 60 million and achieved a goal for 2024 in less than a year. The service started in November 2019.
“In other words, Covid is not giving these companies a temporary boost,” Cramer said. “They were already on the right track, the virus just hit the gas pedal. The cable cutters won’t return once they’re vaccinated.”
Media companies like Disney, Comcast, AT & T. and ViacomCBSAmong other things, they have increased their presence in the streaming world to make up for lost business in pay TV. Their products have found themselves in a streaming environment with stiff competition from people like Netflix, Hulu and Amazon Prime Video.
Roku and The Trade Desk are two companies that are taking advantage of the transition to online media consumption, Cramer said. Roku’s platform gives consumers the ability to access Netflix, Prime, and other online streaming services through television. The Trade Desk is a digital advertising company specializing in video.
Their stocks rebounded last week after companies reported strong earnings reports for the last quarter. While their stock prices pulled back on Monday as the reopening sparked optimism for vaccines, Cramer believes that growth is not yet complete for the companies as the popularity of streaming continues to grow and ad spending follows the eyeballs.
“Now that we can see the light at the end of the tunnel – and I believe so – investors are dropping the Covid winners, but some of the changes over the past eight months are going to be more permanent than people think in my opinion” , he said .
“That’s why I still like Roku and The Trade Desk on the way down,” he added. “You have to be careful … [and] buy in weakness. “
Disclosure: Cramer’s charitable foundation owns shares in Disney, Amazon, and Comcast. Comcast owns NBCUniversal, the parent company of CNBC.