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3 Stocks to Buy and 2 to Sell With the Rise of “New Hollywood”

Hollywood has changed dramatically over the past decade, as the number of moviegoers has declined with the rising popularity of streaming services from Netflix, Inc. (NASDAQ:NFLX), Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) and, Inc. (NASDAQ:AMZN). Rapid evolution in home entertainment technology has also helped, with TVs constantly becoming bigger and sharper and surround sound systems becoming crisper and clearer.

Why go to the movie theater when you can just stay at home?

All these things have slowly eroded what we call “Hollywood.” Meanwhile, a giant cultural shift has been making its way into the film space. What was once seemingly forbidden and taboo is now more openly accepted, with social demands for diversity in films increasing and becoming the norm.

But perhaps the biggest and most recent occurrence to rock the industry?

The mounting accusations of sexual harassment towards Harvey Weinstein. This is just the beginning — countless megastars have been cast under the same shadows, with Kevin Spacey being the latest to get the brunt of negative press. There will doubtlessly be more stories; more actors that lose their jobs and the respect of fans.

But the latest turmoil could very well be the biggest catalyst for “New Hollywood:” changes in the mentality surrounding filmmaking, changes in those who partake in the filmmaking process and changes to how and where films are viewed. With the institution under attack and change being inevitable, a perfect opportunity for some stocks to flip the Hollywood script arises.

With that as a backdrop, I’d like to discuss stocks to buy and sell amid the changes in Hollywood. The list includes popular streamers, movie theater stocks and another name that could be more broadly affected by the changes in the industry.

Right now, NFLX might seem like an odd pick for stocks to buy with the rise of New Hollywood. After all, Kevin Spacey, who starred in the Netflix Original Series House of Cards, is the latest star to experience Weinstein-esque judgement. Anything resembling his — or Weinstein’s — behavior is counter to the shift in cultural expectations that embodies the New Hollywood movement.

However — singular incidents aside — when you look at the bigger picture, Netflix is actually in a prime position to redefine Hollywood. Not only is it at the head of the cord-cutting movement that has wreaked havoc on movie theaters, but it is now developing its own original films. 80 films in 2018, to be exact.

With the original Hollywood mindset in place, Netflix-exclusive films stood seemingly no chance at gaining the same level of respect and awareness as those produced by traditional studios. But with Hollywood in self-destruct mode, a new space to work in could be embraced by actors and actresses far more easily than before. Hollywood is becoming a dirty word; Netflix, much less so if it can squelch the Kevin Spacey controversy.

The key here is for Netflix to embrace its distinction as an “outsider,” while maintaining a high level of quality.

As of now, none of the Netflix original films have reached Hollywood-Blockbuster status, but the more it produces new content and the more the public loses faith in Hollywood, the greater its chances are for it to become a respected filmmaking destination. Combine that with the stock’s already consistent growth story, and it’s easily one of the best stocks to buy in the New Hollywood world.