Why Starz Shares Shot to the Stars

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of media and entertainment company Starz jumped as much as 10% today after it released earnings.

So what: Revenue was up 29% from a year ago to $517.4 million on the back of a 5% rise in Starz subscribers. Earnings fell 7% from a year ago to $63.7 million, or $0.52 per share. But no worries, because Wall Street only expected $406.8 million in revenue and $0.42 per share in earnings, so results easily beat expectations.

Now what: Part of the drag on the bottom line is costs associated with creating original programming. Clearly, investors are looking past that short-term cost to the long-term potential, especially in the streaming market. Shares trade at just 13 times earnings, and I think content is the place to be in media, making this potentially a great buy today.

Interested in more info on Starz? Add it to your watchlist by clicking here.

The article Why Starz Shares Shot to the Stars originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. 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.

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