Well, August is just around the corner and will mark the 6th month of the coronavirus dominating the news and our lives. The past 6 months have certainly been an interesting time for investing. Since 30 January, the S&P/ASX 200 Index (ASX: XJO) has seen the following values: 7,162 points, 4,546 points and 6,051 points (yesterday’s close). Talk about a rollercoaster.
But, wish as we might, the coronavirus pandemic isn’t going away anytime soon. So how does one invest in this new paradigm? We will have to disregard some old assumptions, to be sure. Amongst many things, the pandemic has certainly yanked some changes forward, such as the transition away from cash. The world just isn’t the same as it was just 6 months ago.
So, with this in mind, here is one ASX share that I think qualifies as a ‘coronavirus share’ — meaning a share that I think is well placed to thrive in this Brave New World.
Enter Nine Entertainment Co Holdings Ltd (ASX: NEC)
Nine is a media conglomerate these days, owning the eponymous Channel Nine network (plus the bevvy of sister channels like 9Go and 9Gem), the 9Now streaming platform as well as the old Fairfax Media newspapers and associated websites (including the Sydney Morning Herald, The Age and the Australian Financial Review), the Macquarie Radio network and the Stan streaming platform.
It also retains a significant portion of online property lister Domain Holdings Australia Ltd (ASX: DHG)’s shares. Now, everyone knows that newspapers aren’t exactly a growth area in today’s modern world. Ditto with traditional live TV channels.
But I think Nine is still poised for growth in a post-COVID world. Lockdowns across the world have famously boosted the prospects of Netflix shares, which are up 46.9% year to date. But Nine’s Stan is a direct rival to Netflix. When Nine last reported its earnings back in February (for the 6 months to 31 December 2019), it told us that it now has more than 1.8 million Stan subscribers. Further, it also told us that around 40% of its earnings are now being sourced from its digital platforms.
Due to this growth, as well as the company’s broad and diversified portfolio of media assets, I think Nine is exceptionally well-placed to thrive in a post-COVID world. As such, it is my top ‘coronavirus’ share going into August. On its current share price of $1.42 per share, I also argue that the Nine share price is looking relatively cheap, still close to 30% off of its pre-COVID highs.
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Nine Entertainment Co. Holdings Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.