Game Of Thrones & The Tale Of Time Warner

Written by Jake Mann, WealthLift Finance Editor in Featured, Stock Analysis | 8 comments

For fantasy enthusiasts everywhere, the hit HBO original series Game of Thrones provides an escape from the doldrums of daily life, to a world filled with knights, sorcerers, dwarfs, and even a few fire-breathing dragons.  Much like the flames that spew from the mouths of these monstrous creatures, Thrones has breathed life into a surprisingly boring HBO lineup devoid of past hit shows like Sex and the City, Entourage, The Sopranos, and The Wire.  Currently in its second season, Game of Thrones tastefully combines sex, violence, and wittiness to satisfy TV viewers and critics alike.  The show was nominated for thirteen Emmy Awards in 2011, and won the award for “Outstanding New Program” at the Television Critics Association Award.

Perhaps more importantly, the series’ first season brought over 25 million viewers to HBO.  Overseas, it has become the network’s all-time bestseller, drawing over $2.5 million per episode, which is 50 percent more dough ever attracted by The Sopranos.  In fact, Game of Thrones has HBO executives so excited because it is helping the network to reach untapped markets through use of its online video streaming service HBO Go, which was released earlier this year.  Since 2007, the network has seen relatively little growth in U.S. viewers, though its number of international viewers has nearly doubled.  The hope is that this pattern of global growth can be continued with the introduction of HBO Go, lead by shows like Game of Thrones.  Investors can take advantage of these trends by looking at one particular stock that stands to benefits from these encouraging trends.

A luminescent HBO sign.

Time Warner, Inc. (TWX) – This owner of HBO, Time Warner Cable, is one of the largest media corporations in the world.  The company manages a number of cable TV networks including CNN, TNT, and TBS, though their premium-charging peer HBO has the largest growth potential of the bunch, due to its increasing international popularity.  Any boost from shows like Game of Thrones may lift to TWX stock, which has been relatively stagnant in 2012.  In the intermediate-term, it has yielded investors a return of 72.47 percent since 2009, though the stock has still not recovered to its pre-recession levels.  Looking at the commonly used valuation indicators like P/E, P/B and P/S ratios, shares of TWX are trading at about a 15 percent discount.  With a current stock price of almost $36 a share, we can set a target price of $41 a share, which is coincidentally where TWX was trading before the most recent recession.  Additionally, the company’s revenues are trending in the right direction as they have grown faster than major competitors like Disney (DIS) and News Corp (NWSA), while holding less debt.  All in all, investors – of both the fantasy and non-fantasy realms – should take kindly to Time Warner.  It may just become as loved as Game of Thrones.

Disclosure: The author has no holdings in the stocks mentioned in this article and has no plans to initiate any positions within the next 72 hours.  He does, however, have the intention of rating these stocks on WealthLift.com, a social media website where investment ideas are shared openly and free.

Jake Mann is a Finance Editor at WealthLift.com, pursuing a double major in Economics and Business Administration at Illinois Wesleyan University in Bloomington, IL. In his spare time, Jake enjoys playing guitar, serving as Editor-in-Chief of the Undergraduate Economic Review, and being an active member of Tau Kappa Epsilon.

Related articles: