KanawatTH
The best news for Communications stock investors in 2022: That the year is finally over.
The market at large shed nearly 20% in value during the year, its worst such performance since the global financial crisis in 2008.
There was no help to be had there from the Communication Services sector, easily the worst performer among 11 S&P 500 sectors – declining more than 40% as a group from start to finish in a disastrous outing.
The heavy-weighted Communication Services Select Sector SPDR Fund (XLC) declined just 38.2% in 2022.
Meanwhile, more than a dozen large-cap stocks in Communications shed at least half their value during 2022, hit first by worries about war in Ukraine and ongoing supply-chain concerns, and later by increasing macroeconomic pressures that threatened a healthy ad-sales environment and dampened industry sentiment.
The worst of the worst even lost a full three-quarters of their valuation. Snap (NYSE:SNAP) started 2022 as a $75B-plus company, but after the stock fell a staggering 81% during the year, it was worth not quite $15B, falling out of the top thousand companies worldwide. It was the sector’s biggest loser for 2022.
Nearly as bad were a couple of digital entertainment companies that made their names in videogaming. Sea Limited (NYSE:SE) was the sector’s second-worst big performer in 2022, sliding 77%, and it was trailed closely by Roblox (RBLX), falling 72%.
A number of major Communications names were set to make that top losers list, but mitigated the damage somewhat along the way. Still, it’s a who’s who of value loss among top companies who were also-rans for top decliner in 2022: Meta Platforms (META) -64.2% for the year; Warner Bros. Discovery (WBD) -59.7%; Netflix (NFLX) -51.7%; Charter Communications (CHTR) -48%; Paramount Global (PARA) -44.1%; Walt Disney (DIS) -43.9%; Take-Two Interactive Software (TTWO) -41.4%; and Alphabet: (GOOGL) -39.1%, (GOOG) -38.7%.
Six stocks in just five Communication Services companies were the only large-caps in the sector to pull off gains in 2022. The rare advancers were led by Tencent Music Entertainment (NYSE:TME), up 20.9% this year after a run in the final six weeks jump-started by strong third-quarter earnings.
T-Mobile (NASDAQ:TMUS) was very nearly the best among big names, rising 20.7% for the year with steady increases provided by an ongoing string of profit beats in its earnings reports, juiced by some wireless industry-leading subscriber growth (even if revenues couldn’t quite match up against tough comparisons from later in 2021).
Activision Blizzard (ATVI) joined the top three strictly on January 2022 action: The stock shot up 26% on Jan. 18 on news that Microsoft (MSFT) was pursuing a $69B acquisition of the company, and it spent the year trying to hold that gain as the Federal Trade Commission began to build a legal case against the takeover.
It finished the year up 15% from 2021 (see its 2022 chart vs. big publishing rivals EA and TTWO and the S&P 500 here).
The only six gainers for 2022 among large-cap Communication Services stocks and larger ($10B market cap or more):
- Tencent Music Entertainment (TME), +20.9%;
- T-Mobile (TMUS), +20.7%;
- Activision Blizzard (ATVI), +15.1%;
- Liberty Braves Series C (BATRK), +14.7%;
- Liberty Braves Series A (BATRA), +13.6%.
- Omnicom (OMC), +11.3%.
The five worst performers for 2022 among large-cap Communication Services stocks and larger ($10B market cap or more):
