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Finding the Diversity in Media and Communication Stocks

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Does the success of a DreamWorks (NASDAQ:DWA) film have anything to do with whether Manchester United (NYSE:MANU) can win the Champions League?

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Sometimes when I tell my friends how my investment strategies specialize in media, entertainment, leisure, communications, and related technologies, they seem surprised that I could have two successful money management businesses built around such a narrow focus. I point out that my self-defined universe of investable stocks numbers at least 400.

The next question is often, "But aren't the stocks you invest in highly correlated?" The answer is yes, but not as much you might think.

I've been reminded of the diversity in media and communications several times recently. A journalist at the Hollywood Reporter asked me about DreamWorks Animation (NASDAQ:DWA) over the weekend for an article he was working on regarding the possibility that the company would be sold. About 10 minutes later, news broke that Tom Rothman was leaving as head of Fox Filmed Entertainment just weeks after a deal was finalized for Fox to replace Paramount as DreamWorks film distributor.

Monday night, Liberty Media (NASDAQ:LMCA) announced that it was converting half of its preferred stock stake in Sirius XM Satellite Radio (NASDAQ:SIRI) into voting common shares. The move gives Liberty 32% of the voting power at Sirius, effectively allowing Liberty to nominate and elect its own directors at the next Sirius annual meeting. Clearly, the end game for Liberty taking control of Sirius and defining the future financial strategy for both companies is coming shortly.
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No positions in stocks mentioned.
Entermedia is a long/short equity hedge fund focused on media, communic= ations, and related technologies. Steve Birenberg is co-portfolio manager o= f Entermedia, owns a stake in the Funds' investment management compan= y, and has personal monies invested in the Funds. CBS and Discovery Communi= cations are widely held by Northlake Capital Management, LLC, including in = Steve Birenberg's personal accounts. Steve is sole proprietor of Nort= hlake, a long only registered investment advisor.

The information on this website solely reflects the analysis of or opin= ion about the performance of securities and financial markets by the writer= s whose articles appear on the site. The views expressed by the writers are= not necessarily the views of Minyanville Media, Inc. or members of its man= agement. Nothing contained on the website is intended to constitute a recom= mendation or advice addressed to an individual investor or category of inve= stors to purchase, sell or hold any security, or to take any action with re= spect to the prospective movement of the securities markets or to solicit t= he purchase or sale of any security. Any investment decisions must be made = by the reader either individually or in consultation with his or her invest= ment professional. Minyanville writers and staff may trade or hold position= s in securities that are discussed in articles appearing on the website. Wr= iters of articles are required to disclose whether they have a position in = any stock or fund discussed in an article, but are not permitted to disclos= e the size or direction of the position. Nothing on this website is intende= d to solicit business of any kind for a writer's business or fund. Miny= anville management and staff as well as contributing writers will not respo= nd to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
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