• Reuters, Monday, November 17, 2008 11:16 AM

Have media stock prices bottomed out yet? That's the multi-million dollar question facing investors of Time Warner, News Corp., Disney, Viacom, CBS and other major media firms. According to analysts cited by Reuters, media stocks are looking mighty cheap these days, although they disagree on where the sector will bottom out.

On the one hand, it can't really get much worse: S&P's Movie and Entertainment sub-industry index is down more than 42% so far this year, compared to a 45% overall drop for the Dow Jones Industrial Average. Analysts pointed out that media shares are often the first to be shed from a portfolio in a downturn, but they are also among the first to scooped up as consumer sentiment strengthens.

According to S&P, declines in consumer spending should last through mid-2009. Tuna Amobi, an analyst, says this indicates that media investors will have to wait at least until then for a rally, as consumer discretionary income is "highly correlated" to gross domestic product growth. "The good thing is that these companies lead the rally," Amobi said. Larry Haverty, manager of the Gabelli Global Multimedia Trust, said the bottom looks imminent. "I think the stocks are very, very cheap," Haverty said. "These are very very significant buying opportunities."

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