Risk sentiment among investors has been softening recently and people are taking it off the table. While speaking to CNBC’s “Closing Bells” team, TD Ameritrade market strategist JJ Kinahan gave an insight into the stocks they covered in September. He said there is a risk but people are not taking enough risk and they are looking for sell-off to buy-in.
Roku benefitting from the change of investor sentiment
Kinahan said that the dividend-paying stocks are strong and with low-interest rates, investors are concerned about capital appreciation dividends. This is because it is difficult getting the same elsewhere.
In terms of equities names such as Roku Inc. (NASDAQ: ROKU) and Disney (NYSE: DIS) are ringing bells. He said that Roku witnessed significant selloff in the last two weeks of September. Kinahan indicated that several TD Ameritrade clients were big buyers of the stock following its huge sell-off. Netflix Inc. (NASDAQ: NFLX) has been dominating the streaming business but there is a change of sentiment as people are now focusing on a distribution network.
Kinahan stated that people are now more interested in owning the content provider or distribution network relative to the producer of the content. Although Disney is a producer and distributor of the content people are trying to weigh who will win the streaming world.
Investors buying into the vertical delivery platform
The TD Ameritrade strategist indicated that in September their clients were heavy sellers of Apple (NASDAQ:AAPL). Apple recently launched a streaming service Apple TV+. Investors are becoming nervous about the outcome of China and retail investors are reconsidering what they do with their holdings in the company. Currently, Apple’s market share for smartphones in China is 6.5% trailing local brands in China already with 5G phones.
When comparing Roku and Netflix from the viewpoint of distributors and aggregators of content and not owners it is quite interesting. For instance, Comcast (NASDAQ:CMCSA) and AT&T (NYSE:T) which are distributors of content are both up 30% year to date and Disney is up now 20%. Despite all these investors are buying into the vertical platform of content delivery.