3 Most Undervalued Stocks Right Now

TL;DR

The COVID-19 pandemic has accelerated the shift towards digital advertising, creating undervalued stocks that investors should consider.

Transcript

hey bowtie nation Joseph Hogue here with the let's talk money Channel welcome to another one of these quick market updates and and I just came across some news and what could possibly be some of the most undervalued stocks of the year in a nation when we look back at all of this in 10 years from now I truly believe what we're gonna look back and se... Read More

Key Insights

• ❓ The COVID-19 pandemic has accelerated the shift towards digital advertising, creating investment opportunities in undervalued stocks.
• 🫠 Internet advertising has experienced significant growth over the years, comprising over half of all ad spending in 2020.
• 🫠 Advertisers are replacing canceled TV ads with streaming and digital video ads, indicating a shift in ad spending.
• 👾 Stocks in the digital advertising space, such as Pinterest, Alphabet, and IAC Interactive, show potential for strong growth.
• 🫠 Ad rates on digital platforms like YouTube have rebounded after a decline, suggesting a recovery in internet advertising.
• 🔉 Traditional media companies with streaming services may face challenges due to the overall decline in traditional media sales.
• ✋ Smaller local broadcasters without online presence may be at higher risk.

Questions & Answers

Q: How has the COVID-19 pandemic accelerated the shift towards digital advertising?

The lockdowns and stay-at-home measures have caused a sharp decline in TV ad commitments. Many advertisers plan to replace canceled TV ads with streaming and digital video ads, accelerating the trend towards digital advertising.

Q: Which stocks are considered undervalued in the digital advertising space?

Pinterest (PI) is a promising stock as it has shown solid growth in sales and monthly users. With its search engine-like platform, Pinterest is attractive to advertisers. Google parent company Alphabet (GOOG) dominates the online search market and benefits from the shift to digital ad spending. IAC Interactive (IAC) operates various internet segments, including popular dating sites and video sharing platforms.

Q: How are ad rates on digital platforms like YouTube bouncing back?

After a decline in ad rates in March and April, digital ad rates have rebounded, indicating a recovery in internet advertising. This rebound suggests that advertisers are returning to digital platforms, which is not yet fully priced into stocks.

Q: Which media stocks should investors be cautious about?

Companies heavily reliant on traditional TV models like Comcast, Disney, and AT&T may have some protection through their streaming services. However, the decline in traditional media sales could offset the gains from streaming, making these stocks riskier investments. Smaller local broadcasters without a strong online presence may also face challenges.

Summary & Key Takeaways

• The pandemic has magnified the rise of e-commerce and digital media trends, presenting a unique investing opportunity.

• Traditional TV networks are experiencing a sharp decline in ad commitments, while digital advertising continues to grow steadily.

• Internet advertising has increased from 6.4% of total ad spending in 2006 to over half in 2020.