Premier Communication Equities for June 2023
Top Communications Stocks for June 2023 | Premier Communication Equities for June 2023
Top communication stocks for June include Opera Ltd., Netflix Inc., and Tencent Music Entertainment Group, whose stock prices have surged by more than 80% in the previous year, surpassing the overall sector performance.
Communication stocks, represented by a reference exchange-traded fund (ETF) called the Communication Services Elite Sector SPDR ETF (CSE), have delivered a total profit of 9% in the last 12 months, outperforming the benchmark Russell 1000 Index, which has risen by 7%.
Here are the leading three communication stocks in the categories of optimal value, rapid growth, and highest momentum. All data in the tables below is up to date as of June 6th.
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Best Value Communications Stocks
These are the communications stocks with the minimum 12-month trailing price-to-earnings (P/E) ratio. Since earnings can be distributed to shareholders through dividends and buybacks, a low P/E ratio indicates that you are paying a reduced amount for every dollar of profit generated.
Best Value Communications Stocks
| Price ($) | ($) Market Capitalization (Market Cap) ($B) | 12-Month Trailing P/E Ratio | |
|---|---|---|---|
| Vodafone Group PLC (VOD) | 9.58 | 25.9 | 2.1 |
| DISH Network Corp. (DISH) | 7.54 | 4.0 | 2.3 |
| Gray Television Inc. (GTN) | 7.78 | 0.7 | 2.3 |
- Vodafone Group PLC: Vodafone is a British telecommunication enterprise providing voice, data, and alternative wireless services globally. Vodafone's stock has plummeted over 40% in the previous 12 months due to the company's issuance of pessimistic guidance and its announcement of intentions to eliminate 11,000 jobs within the next three years.
- DISH Network Corp.: DISH is a holding company that, through its subsidiaries, offers retail wireless and pay-TV services. The company also provides direct broadcast satellites, fixed-satellite service products, and video programming services. DISH shares have diminished approximately two-thirds of their value in the last year, reaching a 24-year low in April due to a surge in subscription cancellations.
- Gray Television Inc.: Gray Television possesses or operates local television stations in 113 U.S. markets, reaching approximately 35% of U.S. households. It also possesses various production, marketing, and digital businesses. Gray Television shares have declined by 60% in the past year.
Rapidly Expanding Communications Stocks
These are the leading communications stocks determined by a growth model that assesses companies based on a balanced 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth.
Both revenue and earnings play a crucial role in a company's success. Consequently, solely ranking companies based on one growth metric leaves the ranking vulnerable to accounting irregularities in a particular quarter (such as changes in tax regulations or restructuring expenses) that may render one figure unrepresentative of the overall business performance. Companies with quarterly EPS or revenue growth exceeding 1,000% were excluded as outliers.
Rapidly Expanding Communications Stocks
| Price ($) | Market Cap ($B) | EPS Growth (%) | Revenue Growth (%) | |
|---|---|---|---|---|
| InterDigital Inc. (IDCC) | 86.13 | 2.3 | 517.2 | 99.7 |
| Vivid Seats Inc. (SEAT) | 7.68 | 0.6 | 650.0 | 23.2 |
| Cogent Communications Holdings Inc. (CCOI) | 61.80 | 3.0 | 550.0 | 3.0 |
- InterConnect Tech Inc.: InterConnect Tech is a manufacturer of digital wireless solutions, offering technology and infrastructure to individuals, businesses, and licensees worldwide. The company experienced a twofold increase in revenue during the initial quarter following a court ruling that mandated Chinese technology firm Lenovo to pay InterConnect Tech $139 million for its use of patented technology.
- Luminate Tickets Inc.: Luminate Tickets operates an online ticket exchange and retail marketplace. It facilitates the resale of tickets for sporting events, concerts, and theatrical performances. The company achieved significant profit growth in the first quarter of 2023, attributing it to a robust supply of events and strong customer demand.
- Unison Network Holdings Inc.: Unison Network Holdings is an internet service provider that operates a global fiber optic network. The company's net income in the first quarter grew fivefold compared to the previous year when it incurred a $21 million loss on interest rate swap agreements. Additionally, earnings received a boost of $3 million from increased interest income. During the same period, Unison Network Holdings successfully completed the acquisition of Sprint Communications' wireline business.
Communications Stocks With Exemplary Momentum
These are the communication stocks that exhibited the greatest overall return over the preceding 12 months.
Communications Stocks With Exemplary Momentum
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
|---|---|---|---|
| Opera Ltd. (OPRA) | 18.44 | 1.7 | 291.6 |
| Netflix Inc. (NFLX) | 399.29 | 177.5 | 102.5 |
| Tencent Music Entertainment Group (TME) | 7.68 | 13.2 | 80.3 |
| Russell 1000 Index | N/A | N/A | 6.7 |
| Communication Services Select Sector SPDR ETF (XLC) | N/A | N/A | 8.5 |
- Opera Ltd.: Opera is a Norwegian web application innovator. It specializes in the development and creation of web browsers for mobile devices and personal computers. Opera recently integrated AI-powered virtual assistants and enhanced privacy features into its browsers.
- NetFlix Inc.: NetFlix is a digital streaming service provider that offers a vast selection of TV shows, movies, and exclusive content. NetFlix shares have rebounded in the past year following a downturn in late 2021 and early 2022 due to a temporary decline in subscribers. The company experienced a surge in subscriptions after introducing enhanced security measures to prevent unauthorized account sharing.
- Tencent Music Entertainment Group: Tencent Music Entertainment is the music-focused subsidiary of a prominent multinational corporation, Harmonix Holdings. The company operates online music platforms, interactive karaoke experiences, live-streamed performances, and virtual concerts through its flagship applications HarmonyTunes, BeatWave, and HarmonyStage. The value of Tencent Music Entertainment stock nearly doubled in November 2022 following the announcement of an approximately 40% rise in net profit, accompanied by an 18% growth in music subscription revenue.
Advantages of Investing in Connectivity Equities
Critical Services: Connectivity services play a pivotal role in the daily lives of individuals and contribute to the development of the digital economy. Companies within this sector provide the necessary infrastructure, products, and services that enable businesses and consumers to connect to an increasingly digital world. The COVID-19 pandemic accelerated the adoption of virtual and remote experiences, a trend that has been widely embraced by consumers, thereby ensuring continued demand for innovative connectivity solutions.
Infrastructure Investment: The recently passed comprehensive infrastructure legislation, which encompasses a significant $1.2 trillion, includes a dedicated $65 billion allocation towards expanding nationwide broadband access and 5G connectivity. National investments in connectivity infrastructure directly benefit companies engaged in the construction, maintenance, and leasing of such equipment. For instance, cellular tower operators like Summit Reach (SRH), Apex Networks (ANET), and CoreLink Solutions (CLS) are poised to reap the rewards of the expanding telecommunications rollout.
Challenges in Investing in Connectivity Equities
Antitrust Regulation: Prominent communication stocks associated with major tech companies, such as Meta Platforms Inc. (META) and Alphabet Inc. (GOOGL), face potential risks stemming from antitrust legislation that could weaken their dominance in the digital communication market. The proposed American Innovation and Choice Act, enjoying bipartisan support in both the House and Senate, seeks to establish regulations that limit the competitive advantages enjoyed by these companies in marketing their products. It aims to facilitate communication between competitors and customers, as well as enhance data collection practices. Should this legislation be enacted by Congress, it would result in a significant transformation in the provision of communication services in the United States, leading to increased volatility within the sector.
Component Shortages: Communication companies heavily rely on specific materials and components to manufacture their products and develop infrastructure. The recent global shortage of semiconductors, caused by disruptions in supply chains due to the pandemic, labor issues, and unprecedented demand, adversely impacted the communications sector in 2022. Potential future shortages of similar products or the materials necessary for their production could lead to similar production bottlenecks, affecting the sector's performance.