SALM - Noble Capital Markets Media Sector Review - Q4 2021

When it comes to investing, It is often said that “prior performance may not be reflective of future results”, and that was certainly the case in 2021. Stocks in the Internet and Digital Media sectors performed well in 2021, but not nearly as well as the broader market (the S&P 500), which finished the year up 27%. Only the Noble’s Digital Media Index (+47%), outperformed the S&P 500, while stocks in the Social Media (+17%), Mar Tech (+14%), Ad Tech (+10%) and eSports & Gaming (-29%) Indices underperformed. In many respects, Internet and Digital Media stocks were victims of their own success. In 2020, when the S&P 500 finished up 16%, Noble’s Ad Tech (+178%), Mar Tech (+65%), Social Media (+41%) and Digital Media (+38%) Indices all significantly outperformed the S&P 500 (NOTE: Noble launched the eSports & Gaming sector in 1Q 2021). Many stocks in the Internet & Digital Media were “Covid beneficiaries” and benefited from increased time spent at home viewing on-demand video content or playing video games. As consumers began to resume their normal lives in 2021, the Covid beneficiaries began to face difficult comparisons. Zoom Communications (ZM) is the poster boy for this effect: shares of Zoom increased nearly 400% in 2020 but fell by 46% in 2021. Read More >>