The market seriously under-appreciates Discovery Communications and 21st Century Fox, Nomura Securities senior analyst Anthony DiClemente told CNBC’s Squawk Box 3/26. They’re due for 20% pops he said. DiClemente put both stocks in a tier above most other media options as he provided his three strongest plays in the sector. He also said Disney is a hot stock that should remain solid. Disney shares jumped more than 40% in the past year.
“Taking a step back from media, these stocks have a better growth than the market,” said DiClemente. “They return a lot of capital to shareholders.”
He likes the other stocks because of their global appeal and content rights. In particular, he said, Fox shows strong affiliate fee growth thanks to its broadcast rights of major sporting events.
Shares of 21st-Century Fox should hit $40—a 23% increase from where the stock opened Wednesday, DiClemente contends. Discovery should also see close to a 20% pop from current levels, he added. DiClemente put his price target on Discovery at $100 a share.
“When you look at everything that’s going on with the Internet and digital media, content is king,” he said.