7 Publicly Traded Companies That Are Killing It on TikTok
InvestorPlace - Stock Market News, Stock Advice & Trading Tips With savviness and a finger on the pulse of popular culture, these relevant TikTok stocks could eventually turn out to...
There are plenty of reasons you may want to consider adding so-called TikTok stocks to your portfolio. By "TikTok stocks" I'm indicating shares of publicly traded companies that have either a direct presence or indirect footprint via a subsidiary on the ultra-popular platform
Believe me, if you want to be anything, it helps to be known on TikTok. After all, it was the most popular app in 2019 and 2020. In those years Tik Tok had download frequencies of 693 million times and 850 million times, respectively. The platform is an advertiser's dream.
The dominance should continue in 2021 and this year as well. According to a September 2021 article from The Verge, the platform reported that it passed the one-billion-user mark. Understandably, those who don't care for social media tend to view the app as kids dancing to music as their phones record their gyrations. But the goofiness can lead to serious dollars.
Of course, not every opinion about TikTok has pleasant implications. Back during the Trump administration, the president issued an executive order addressing the threat that the app posed. Because the platform is owned by a Chinese company called ByteDance Ltd., it allegedly gives the powers at Beijing trojan horse access to potentially sensitive information. Thus, TikTok stocks once faced the threat of losing their favored advertising venue.
Although President Biden revoked and reversed the executive order in question, it could be game on again, especially with Trump gaining momentum with likely voters. Still, banning the app outright would be a gargantuan task. So for now, these TikTok stocks might add some diversity to your holdings.
- Starbucks (NASDAQ:SBUX)
- Mondelez (NASDAQ:MDLZ)
- Kering (OTCMKTS:PPRUF)
- Comcast (NASDAQ:CMCSA)
- Disney (NYSE:DIS)
- Ryanair (NASDAQ:RYAAY)
- Netflix (NASDAQ:NFLX)
As with anything in the capital markets, you don't want to use any one factor to base your investment decisions. While social media is a powerful tool, it doesn't necessarily mean that TikTok stocks themselves will automatically rise higher. Ultimately, you must conduct your own due diligence before proceeding.
TikTok Stocks to Buy: Starbucks (SBUX)
Perhaps America's favorite addiction, Starbucks has been the catalyst to slog through the workday for millions of corporate employees. However, even the mighty coffee shop chain could not overcome the pressure of the coronavirus pandemic. Its revenue for the year ended Sept. 30, 2020 down more than 11% from the prior year.
Fundamentally, it's still been a tough road for the company, with millions of workers operating remotely. However, Starbucks commands a huge presence on TikTok.
According to The Social Shepherd, it makes "the most out of TikTok by announcing new flavours with famous faces and entertaining transition videos. Also, showcasing their years of experience in coffee-making by interviewing baristas and following relevant trends to make funny and relatable videos."
Coincidentally, Starbucks generated over $29 billion in revenue for the year ended Sept. 30, 2021, up almost 24% year-over-year. This makes it one of the most financially sound TikTok stocks available.
Nevertheless, SBUX is down 20% on a year-to-date basis. Therefore, prospective investors should consider waiting out market volatility before taking a shot.
A popular childhood favorite, the Oreo brand also commands a powerful presence on TikTok.
According to The Social Shepherd, on the app, "they make the cookies the main characters by making them talk, creating funny and relatable videos. This way, they promote their products in every single video but still providing entertaining content."
To me, it sounds a little kooky. However, this type of entertainment is what sells. Therefore, if you're looking for possibly viable TikTok stocks to buy, you might want to consider Mondelez, the parent company of the Oreo brand.
One of the few companies that fortuitously benefitted from the Covid-19 pandemic, Mondelez generated revenue of $26.6 billion in 2020, up almost 3% from the prior year. Further, in 2021, the confectionary giant posted top-line sales of $28.7 billion, again delivering growth — this time to the tune of 8%.
Back during the initial onslaught of the global health crisis, restaurants and other non-essential services closed. This in turn boosted grocery sales, which Mondelez took advantage of. It's still moving forward, perhaps because of its social media exposure.
Tik Tok Stocks to Buy: Kering (PPRUF)
An iconic Italian fashion brand, Gucci gained even more exposure — and perhaps some notoriety — from the film House of Gucci, which stars multiple Hollywood heavyweights, including Jared Leto and Lady Gaga. But it's not just on the big screen that the fashion house excels. Turns out, it's also one of the top TikTok stocks around.
Of course, Gucci isn't by itself one of the TikTok stocks you can acquire directly. Instead, if you want exposure to this brand, you must do so through parent company Kering.
As a luxury specialist, Kering was unsurprisingly hit hard in 2020, with revenue nearly 10% from 2019's result. However, on a trailing-12-month (TTM) basis, the company has posted sales that are conspicuously above pre-pandemic norms.
Note that PPRUF is an over-the-counter stock, which may present "administrative" issues like inadequate liquidity.
With the advent of video-sharing platforms like YouTube and of course TikTok, young people don't gravitate toward traditional media outlets for entertainment as did previous generations.
That has left many "tethered" media giants scrambling for an answer. Turns out, some traditional entertainment brands are fighting fire with fire. Enter Saturday Night Live, a decades-long icon of tethered TV.
SNL takes the opportunity to use the app as a behind-the-scenes access point for its fans. This generates more attention than the show would likely otherwise command.
Now, I'm not going to suggest that the app alone is a reason to acquire shares of Comcast, which in partnership with Lorne Michaels oversees SNL via NBC studios. But technically, CMCSA is one of the TikTok stocks that's killing it on the platform.
As well, it's not inconceivable that other Comcast-related brands could leverage TikTok to generate more interest and demand. If you can handle the risk, CMCSA could be for you.
Tik Tok Stocks to Buy: Disney (DIS)
Rival to Comcast and the owner of the happiest place on earth, Disney is not only one of the TikTok stocks to buy but could conceivably fit across multiple investment categories.
However, it belongs on this list because it's leveraging social media to draw interest to its subsidiary brands, especially National Geographic.
Due to its exposure to traditional or physical businesses (most notably its theme parks and resorts), Disney suffered a 6% loss of revenue in its year ended Sept. 30, 2020. However, for the fiscal year 2021, it demonstrated a modest recovery and on a TTM basis, it's on track to exceed pre-pandemic sales.
This one surprised me because I didn't expect a commercial airliner to have a robust presence on a social media platform like TikTok. Nevertheless, Ryanair is one of the more memorable TikTok stocks to buy, in part because the firm is using the platform to sell itself, not a subsidiary brand.
As The Social Shepherd noted, "It might seem like there's not much to show or entertain their audience with. Still, they use their TikTok platform to share memes and follow relevant trends by making their planes the protagonists and creating funny videos with which their audience can relate."
Hopefully, these comical videos can also help cool tensions in the friendly skies.
To be fair, Ryanair is an Irish ultra-low-cost carrier, which means that its consumer base is far more limited than say the carriers we're mostly familiar with. But it's also possible that its smaller size could help make initiatives like the TikTok campaign accrue a higher return.
Frankly, the company will need it since its financials have been badly bruised from the Covid-19 pandemic.
Tik Tok Stocks to Buy: Netflix (NFLX)
One of the "heroes" of the capital markets during the early days of the Covid-19 crisis, Netflix benefitted handsomely.
Sure, it was a cynical benefit, with the health threat accelerating the cord-cutting phenomenon. It also didn't hurt that professional (and collegiate) sports leagues suspended or delayed their seasons, enabling digital entertainment providers to rise to the top.
Of course, NFLX was one of those names. It's also among the TikTok stocks thanks to the company leveraging social media in its favor.
Just as SNL does to gin up interest for upcoming shows, Netflix uses TikTok to provide behind-the-scenes content for fans. As well, the app enables viewers to get a deeper look into the people that portray certain compelling characters.
In terms of financials, the company continues to deliver growth. However, maintaining momentum in the subscriber count has been a huge worry regarding its latest earnings disclosure.
Investors clearly have the jitters, with NFLX down more than 36% YTD. Personally, I'd like to wait a little bit more for the volatility to die down. But once it does, the streaming service is one of the TikTok stocks to consider.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
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