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3 Communication Services Stocks to Buy as the Sector Keeps Growing
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The Communication Services sector comprises companies that provide wired, wireless, satellite, cable, Internet media services, broadcasting and other communication infrastructure. The sector is marked by its strong fundamentals.
Communication Services, being closely related to the tech sector, has been one of the fastest growing sectors over the past year on tech resurgence. As of December, The Communication Services Select Sector SPDR (XLC) had grown 52.8% year to date, trailing only the broader tech sector.
Alongside tech stocks, communications companies are usually some of the most innovative businesses available for investors to delve into. These companies constantly invest in new technologies and innovation and henceforth offer significant opportunities for price appreciation. Since they offer products and services that consumers use everyday, these offerings end up improving standards of living around the globe.
There have been sectoral headwinds, too, in 2023. For instance, the telecom sub-sector received a blow when The Wall Street Journal published a series of articles on the potential environmental liabilities of lead-sheathed cables. Also, antitrust investigations, under the watchful eye of bipartisan regulators, could soon become a thing for the world's largest social and communications companies. Regardless, the communication services sector has bounced back from the 2022 slump and has continued to grow, driving the tech sector with it.
Sectors that have strong fundamentals usually come out of a downturn relatively unscathed by cutting costs and maintaining strong balance sheets. Also, since the Fed announced its plans of at least three expected interest rate cuts in 2024, not many market participants are talking about recession. In such an environment, mega-cap growth stocks like tech and communication services seem lucrative as they currently seem undervalued.
Thus, we have selected three communication services stocks that should be gaining ground in the ensuing months and should be looked into now. The stocks below flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy). The search was also narrowed down with a VGM Score of A or B. Here V stands for Value, G for Growth and M for Momentum; the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners.
Meta Platforms, Inc. (META - Free Report) is a company that engages in the business of connecting people digitally. It is one of the largest social media companies in the world.
Meta’s expected earnings growth rate for the current year is 45.9%. The Zacks Consensus Estimate for its current-year earnings has improved 0.6% over the past 60 days. The company has a Zacks Rank #2 and a VGM Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
Telefonica Brasil S.A. (VIV - Free Report) is a mobile telecommunications company from Brazil. Its services include local, domestic, long-distance and international calls, and its mobile portfolio comprises voice and broadband Internet access.
VIV’s expected earnings growth rate for the current year is 27.7%. The Zacks Consensus Estimate for its current-year earnings has improved 1.7% over the past 60 days. The company has a Zacks Rank #2 and a VGM Score of A.
NetEase, Inc. (NTES - Free Report) engages in the business of online games, music streaming, online intelligent learning services and Internet content services in China and globally.
NTES’ expected earnings growth rate for the current year is 44.6%. The Zacks Consensus Estimate for its current-year earnings has improved 4.3% over the past 60 days. The company has a Zacks Rank #1 and a VGM Score of B.
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3 Communication Services Stocks to Buy as the Sector Keeps Growing
The Communication Services sector comprises companies that provide wired, wireless, satellite, cable, Internet media services, broadcasting and other communication infrastructure. The sector is marked by its strong fundamentals.
Communication Services, being closely related to the tech sector, has been one of the fastest growing sectors over the past year on tech resurgence. As of December, The Communication Services Select Sector SPDR (XLC) had grown 52.8% year to date, trailing only the broader tech sector.
Alongside tech stocks, communications companies are usually some of the most innovative businesses available for investors to delve into. These companies constantly invest in new technologies and innovation and henceforth offer significant opportunities for price appreciation. Since they offer products and services that consumers use everyday, these offerings end up improving standards of living around the globe.
There have been sectoral headwinds, too, in 2023. For instance, the telecom sub-sector received a blow when The Wall Street Journal published a series of articles on the potential environmental liabilities of lead-sheathed cables. Also, antitrust investigations, under the watchful eye of bipartisan regulators, could soon become a thing for the world's largest social and communications companies. Regardless, the communication services sector has bounced back from the 2022 slump and has continued to grow, driving the tech sector with it.
Sectors that have strong fundamentals usually come out of a downturn relatively unscathed by cutting costs and maintaining strong balance sheets. Also, since the Fed announced its plans of at least three expected interest rate cuts in 2024, not many market participants are talking about recession. In such an environment, mega-cap growth stocks like tech and communication services seem lucrative as they currently seem undervalued.
Thus, we have selected three communication services stocks that should be gaining ground in the ensuing months and should be looked into now. The stocks below flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy). The search was also narrowed down with a VGM Score of A or B. Here V stands for Value, G for Growth and M for Momentum; the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners.
Meta Platforms, Inc. (META - Free Report) is a company that engages in the business of connecting people digitally. It is one of the largest social media companies in the world.
Meta’s expected earnings growth rate for the current year is 45.9%. The Zacks Consensus Estimate for its current-year earnings has improved 0.6% over the past 60 days. The company has a Zacks Rank #2 and a VGM Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
Telefonica Brasil S.A. (VIV - Free Report) is a mobile telecommunications company from Brazil. Its services include local, domestic, long-distance and international calls, and its mobile portfolio comprises voice and broadband Internet access.
VIV’s expected earnings growth rate for the current year is 27.7%. The Zacks Consensus Estimate for its current-year earnings has improved 1.7% over the past 60 days. The company has a Zacks Rank #2 and a VGM Score of A.
NetEase, Inc. (NTES - Free Report) engages in the business of online games, music streaming, online intelligent learning services and Internet content services in China and globally.
NTES’ expected earnings growth rate for the current year is 44.6%. The Zacks Consensus Estimate for its current-year earnings has improved 4.3% over the past 60 days. The company has a Zacks Rank #1 and a VGM Score of B.