2. Communications Services
Communications services stocks as a group outperformed the broader market in the second quarter, with Alphabet and Facebook accounting for most of the sector’s gains, director Mike Hodel says. “As 2021 has progressed, we’ve sharply increased our expectations for advertising growth based on both cyclical and emerging longer-term factors.” On the development front, Morningstar analysts think AT&T’s announced spinoff, WarnerMedia, should have the scale and content needed to take on the likes of Netflix and Disney, Hodel says. In addition, ViacomCBS issued new equity in March, and they expect the added capital to serve it well.
Alphabet (GOOG), Lumen Technologies (LUMN), ViacomCBS (VIAC)