The 2016 share press meltdown has made riveting viewing, if you like horror movies, that is. The body count may have fallen as markets have stabilised over the last couple of days, but markets remain fearful.
Screen queens
Yet not everybody has fallen victim to the serial share price killer. Broadcasters ITV (LSE: ITV) and SKY (LSE: SKY) have gamely stood their ground. Since that calamitous opening trading day on Monday 4 January, ITV has fallen just 1p to 268p, while SKY is actually up 2p to 109p.
Investors have been in no rush to sell these two stocks, clearly trusting in their strong past performance and bright future prospects. The FTSE 100 may be down 8.5% over the past year but ITV is up 27% and SKY is up 24% over the same period.  ITV is the clear winner over five years, during which time it grew 270%, against a 50% rise at SKY. The FTSE is flat over the same period.
ITV flies
One reason ITV has outperformed is that it surprised markets, in a good way. Many had written off the company, assuming it would fall victim to changing market trends, such as the rise of the Internet, tough competition from digital TV companies  (notably SKY), and slumping advertising volumes. Instead, it has risen to the challenge, notably through its successful ITV Studios global entertainment division, now entertaining the world with Poldark, Beowulf and, ahem, Autopsy USA. ITV also won big time with last year’s Rugby World Cup.
One consequence of this success is that it is now expensive, trading at nearly 20 times earnings, and yielding a paltry 1.5%. I have written so many articles about stocks trading at single digit valuations and yielding almost double-digits that this comes as a shock. It is also testimony to investor faith in ITV. Broker Bernstein has just reiterated its overweight view and set a target price of 325p, up more than 20% on today’s valuation. Future growth should be driven by acquisitions and further production success in the US.
SKY is the limit
SKY is one of the most profitable media companies in the world, with revenues of ÂŁ2.8bn in its last reported quarter and operating profits up 10% at ÂŁ375m. The company’s success in the UK has been driven by Premier League, Sky Atlantic and its flourishing broadband business, but it is also making inroads in Europe, broadcasting the Bundesliga in Germany and the X Factor in Italy, following the recent merger with its sister companies in those two countries.
Again, investors pay a price for success, in this case almost exactly the same price as ITV â a pricey valuation of 19.5 times earnings, but with a higher yield of 3%. SKY does face a challenge on home turf with the emergence of BT Group as a Premier League challenger, but it still remains the team to beat.
ITV and SKY’s solid display in recent weeks point to a bright future, with markets confident that even if the economy slows, we will keep watching television.