4 Ways You Can Profit From the Zombie Apocalypse
The zombie apocalypse is upon us again. After nearly four months, the DISH Network (DISH) satellite provider reached a deal to carry AMC Networks' (AMCX) content just in time for last night's second episode of "The Walking Dead."
Talk about a close call. Season 3 of "The Walking Dead, based on the popular comic book series created by Robert Kirkman, Tony Moore, and Charlie Adlard, premiered on Oct. 14 to record ratings, topping its own record Season 2 premiere draw of 7.3 million viewers -- 11 million if you count reruns.
This year opened with about 11 million viewers (15.2 million overall), reports The Washington Post. And that was without help from DISH Network.
Clearly we're in a post-apocalyptic mood, as hooked on zombies as we are on vampires.
Hollywood Says "Hooray!" for the Apocalypse
Whenever a show or concept proves to be a winner, it's a sure bet other media outlets will come along. The success of the Twilight series brought us "The Vampire Diaries" and helped get HBO to bite on turning Charlaine Harris' Sookie Stackhouse series into "True Blood."
The Hunger Games, a best-seller that was turned into movie that earned $686 million at the box office for Lions Gate Entertainment (LGF), appears to have inspired the NBC series "Revolution" and a forthcoming show from the CW network called "The Hundred," about a group of kids forced to repopulate Earth.
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If "The Walking Dead" hasn't yet spawned a copycat, it's because the show (and likewise, the comic book series) isn't so much about zombies as it is survival in a largely dead world that's none too kind to the living souls who remain.
That's problematic for TV producers and investors alike. Not since "The Twilight Zone" has TV explored post-apocalyptic themes so contemplatively while also delivering a few well-timed adrenaline shots. Your best bet for investing in the next "Walking Dead" is, well, investing in "The Walking Dead."
Here are four stocks that will help you to do exactly that:
1. AMC Networks -- This is the obvious choice. AMC is the TV home to "The Walking Dead," and as such, collects a big chunk of ad revenue from the series. Show sales through Apple's (AAPL) iTunes and Amazon's (AMZN) Instant Video service likely add an incremental kicker, but not nearly so much as what Netflix (NFLX) must be paying to stream Seasons 1 and 2 to subscribers. (Hulu doesn't have access to those episodes.) Of course, "The Walking Dead" isn't the only hit show on AMC right now. "Breaking Bad" put up huge ratings over the summer, while "Mad Men" has been a winner for years now. Yet with all these successes, the stock still trades about even with the long-term earnings growth analysts expect. A premium valuation seems more appropriate.
2. Activision Blizzard (ATVI) -- The video game publisher is developing a first-person-shooter game based on the TV series called "The Walking Dead: Survival Instinct," due next year. Modeled as a prequel, it lets players assume the role of crossbow-wielding character Daryl Dixon in his journey across Georgia's zombie-populated countryside.
3. Facebook (FB) -- An oddball pick, to be sure, since the social network has no direct relationship to the show or the comic book, but here's what it does have: rights to host a social game based on the series that, as of this writing, had more than 645,000 "likes" and 130,000 daily active users. Relationships such as these can become a meaningful contributor for Facebook, which still gets 10% of its revenue from gaming partner Zynga (ZNGA).
4. Fortress Investment Group (FIG) -- Fortress also has no direct involvement with any Walking Dead property, but it owns a minority stake in Legendary Pictures, which in addition to co-producing Christopher Nolan's "Batman" films with Time Warner (TWX) is also parent to Nerdist Industries, whose founder Chris Hardwick hosts the popular "Walking Dead" after-show, "Talking Dead," on AMC. A reference worthy of Stretch Armstrong? Sure, but Fortress pays shareholders a meaty 4.40% dividend yield for enjoying a distant view of the apocalypse.
What do you think of "The Walking Dead"? Would you invest in this zombie tale, or is there a better way to play our current fascination with all things post-apocalyptic? Make your voice heard by leaving a comment in the space below.
Motley Fool contributor Tim Beyers owned shares of Netflix and Time Warner at the time of publication and had a long-term call options position in Netflix. The Motley Fool owns shares of Amazon.com, Facebook, and Netflix. The Motley Fool has bought calls on Facebook. The Motley owns shares of and has written calls on Activision Blizzard. Motley Fool newsletter services have recommended buying shares of Activision Blizzard, Amazon.com, Facebook, and Netflix. Motley Fool newsletter services have recommended creating a bear put ladder position in Netflix and a synthetic long position in Activision Blizzard.
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