TV Is a 'Turnoff' for More Than Half of America — But This Stock Is 'Turning On' the Profits
It doesn't seem that long ago when the "heart" of the American home was the television set.
That "set" was really a bulky box — with brand-name badges like RCA or Zenith — that was built around a piece of technology called a "cathode-ray tube," or CRT.
That CRT was a display device — but it was also a family magnet… and it transformed the TV set into a catalyst for shared experiences.
In the 1960s, the TV gathered mothers and dads, and sons and daughters to watch, in awe, as U.S. astronaut Neil Armstrong took that "one small step for man" — onto the surface of the moon.
In the 1970s, the TV brought images of the Vietnam War and the Watergate hearings into the home — giving Americans a harsher view of their government, and the world around them.
In 1980, the TV displayed the "do-you-believe-in-miracles" Winter Olympics where the U.S. men's hockey team came from behind to beat the "Soviet Juggernaut" by 4-3, with chants of "USA" filling living rooms across the country.
In the 1990s, the "TGIF" lineup of Boy Meets World, Step by Step, and Family Matters was the catalyst for family pizza nights.
Advances in technology mean we're no longer shackled to that TV and no longer a servant to a set schedule; we can watch quick YouTube clips on our phones during our walk to work or binge half a season of a show on a tablet during a cross-country train ride.
Content consumption is increasingly becoming a "solo" activity, and it has led to a historic moment — an inflection point in viewership: This year, for the first time ever, fewer than half of Americans watch "traditional" television.
According to the latest data from Nielsen, the main sources of viewing are now:
Streaming: 39%
Pay TV: 29.6%
Broadcast TV: 20%
This is all interesting, but I'm more interested in the investing opportunity. And Jason Bodner — creator of the Quantum Edge system — found one.
But as you'll see in just a minute, it's probably not the one you're thinking of…
Meet the Streamers
By now, most folks are well acquainted with the biggest streaming providers:
Netflix Inc. (NFLX) reigns at the top of the streaming kingdom with 238.5 million subscribers.
Prime Video from Amazon.com Inc. (AMZN) places second with 200 million subscribers.
Walt Disney Co. (DIS), with its Disney+, ranks third with 146.1 million subscribers.
Jason's able to run each stock through his Quantum Edge system that he spent decades perfecting. As a career tech guy, and as someone who programs software and algorithms myself, I understand what it took to make Jason's system work — which is why we've spent hours discussing the "edge" it gives investors.
But I won't bore you with those details, because all you really need to know is that the Quantum Edge system finds stocks backed by superior company fundamentals, powerful technicals, and Big Money coming in.
If you're looking to own a provider, Netflix is the clear winner in his Quantum Edge system, with a Quantum Score of 69. That's right on the border of the sweet spot buy zone between 70 and 85.
The fundamentals and technicals each rate right around 70, which is quite good.
The one concern Jason would have with Netflix is the company's high debt load, at 81.5% of equity.
Amazon's Quantum Score comes in nearly 10 points lower at 60.3. Jason says the technicals are solid… but not spectacular.
He says what's more concerning is Amazon's negative profit margin, high debt, and high valuation.
"There are just better opportunities for your money," he told me.
Then there's Disney and its low Quantum Score of 37.9, making it a stock to stay far away from.
Out of the three most well-known investable streamers, Netflix won the battle.
But Jason says there's an even better opportunity in the investable streaming space that most people have probably never heard of.
TradeSmith, one of the world's most cutting-edge financial tech companies, just launched a breakthrough, new A.I. algorithm called An-E... and showed many of its past predictions and just how accurate they were (often precise to within a tenth of a percent).
The company also showed what An-E's predictions were for three of the most widely held stocks on the market one-month into the future.
Jason says a better way to make money on the streaming trend is to look to companies providing the necessary equipment, services, and infrastructure to make it possible.
The streaming "pick-and-shovel" investments if you will.
And he has a great example: Arista Networks Inc. (ANET).
All that video being streamed has to be stored somewhere, and it needs to be accessible without blips or those spinning circles that always seem to appear during moments of peak drama or major plot twists.
That's where Arista comes in — it develops and sells cloud networking solutions to more than 9,000 customers in a range of industries.
With a stellar Quantum Score of 86.2, ANET is one of the top-ranked stocks in his system. The fundamentals and technicals also rate in the mid- to upper 80s, and Big Money has been buying shares all year.
This is exactly the trifecta he likes to see when buying a stock.
Shares have shot nearly 50% higher in the last 12 months, and all of his data and analysis point to higher prices in the future.
In fact, some of the most bullish outlooks see ANET reaching $225 over the next year, a tidy 21% potential move higher.
Jason says these are the kinds of stocks you want to own as we get through summer volatility and head towards a big finish to 2023.
So, the next time you're streaming your favorite video, Jason says think about what's necessary to make that possible — there's an investment opportunity hiding in plain sight.
Enjoy your Thursday,
Keith Kaplan CEO, TradeSmith
Get Instant Access
Click to read these free reports and automatically sign up for research throughout the week.
TradeSmith is not registered as an investment adviser and operates under the publishers' exemption of the Investment Advisers Act of 1940. The investments and strategies discussed in TradeSmith's content do not constitute personalized investment advice. Any trading or investment decisions you take are in reliance on your own analysis and judgment and not in reliance on TradeSmith. There are risks inherent in investing and past investment performance is not indicative of future results.
Post a Comment
Post a Comment