On today’s segment of Good Buy or Goodbye, host Julie Hyman is joined by BD8 Capital Partners CEO and CIO Barbara Doran to discuss her top stock pick within the music industry.
Doran recommends Universal Music Group (UMG.AS) as a stock to buy. She highlights streaming growth and price increases among UMG artists, "driven by names like Spotify (SPOT)." She notes the shift toward more "artist-centric" music platforms, where each song download directly pays the artist, benefitting UMG.
Doran also emphasizes UMG’s position among the "big three" in the music industry — Universal, Warner, and Sony (SONY) dominating market share "with almost 30% of share." Additionally, UMG’s deep catalog of high-profile artists, including Taylor Swift and Kendrick Lamar, is a strong asset: "When you have all the big names, it makes it much easier to recruit new names."
Conversely, Doran advises investors to avoid Warner Music Group (WMG). She cites the company’s smaller size and scale as a limiting factor in attracting new artists and innovating due to resource constraints. Doran points to challenges in artist recruitment, describing their execution as "a bit erratic." Lastly, she mentions ongoing pricing pressure issues affecting the company’s performance.
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