Shares of Rogers Communications (TSX:RCI.B) have been really picking up speed in recent weeks, with shares adding just north of 5% to their value after last week. Indeed, the telecom scene has been a really hard place for investors to stay in, to say the least. Competition remains intense, and spending expectations really do feel quite high.
But with interest rates on the descent (and more rate cuts probably on the way from the Bank of Canada in the coming quarters) and a massive season for sports underway, I think Rogers might finally be worth careful consideration, especially since it’s spent most of the past two years in the penalty box. Since bottoming out in April, however, Rogers stock has been out of the box and on a breakaway. With the latest melt-up in the shares, I think that the nearly $30 billion telecom has finally reached a turning point, so to speak.
The Blue Jays are going to the World Series: That’s a home run for Rogers stock!
While chasing fallen stocks is a tough thing to do, I think that Rogers shares have all the makings of a sustainable bounce-back contender, as sports look to power next-level strength, with hockey season off to a hot start and the Toronto Blue Jays punching their ticket to the World Series. Indeed, it’s going to be a fun autumn for Canadian sports fans and perhaps an even more fun quarter for shareholders of Rogers Communications. If the Jays do win the World Series (and I do think they will), look for a wave of new fans to start following the Jays closely for years to come.
Indeed, championships win new generations of fans. And as many Canadians look to jump aboard the bandwagon (myself included), the ratings may very well have the potential to surpass even the most aggressive of estimates. Sure, Sportsnet Plus received a lot of flak for its recent price increases. But for many Canadians, it’s either pay the price of admission or run the risk of missing out on a historic moment in Canadian sports.
Don’t bet against the latest upswing in shares
Add the NHL and NBA seasons into the equation, and Sportsnet Plus may very well be just as sticky, if not stickier, than the likes of other streaming platforms. In any case, I think the latest rally in the chase might be worth chasing, even though they’ve already been a huge grand slam for investors who bought the dip at the start of the year, when RCI.B shares were hovering under $35 per share. At the end of the day, Rogers is now in the right place at the right time with the sports business finally looking to pay dividends.
Despite the latest wave of strength, RCI.B stock is still down big-time (around 26%) from its prior all-time highs. The big question moving forward is whether new heights (think $77 or so) can be reached at some point over the medium term. With a bit of help from the Jays and the Bank of Canada (more rate cuts coming?), I think Rogers Communications stock looks like a great buy on strength. There’s still a nice 3.7% yield to get behind as well.
