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Every once in a while, I like to step back and analyze my entire portfolio as a whole. First, I gauge the portfolio's overall performance, as compared to the major indices, and then I break it down by individual sector/industry to analyze the ongoing or developing trends. I find it extremely beneficial to locate, study and understand as many current trends in the equity markets as possible, particularly those that can be viable for the long term, as they can often remain areas of continued outperformance. As the popular saying goes, "the trend is your friend."

The main idea of this article is simple: highlight the overall trends that have been driving growth in my portfolio, explain why the trends have been positive and determine whether they can remain viable for the future. Additionally, I will highlight the specific equities that I own in each sector/industry and explain why I believe the stocks are among the best choices for long-term growth.

My Portfolio:

My portfolio is geared for growth over the long-term and as such, is positioned to best capitalize on what I believe are two of the most powerful trends in the market today: media content-creation and payment solutions. My assortment of equities can essentially be divided into three segments: media content-related stocks, payment-related stocks and everything else. In total, I own only 10 individual equities, three of which are media content-related and three of which are payments-related. The remaining four stocks are split among a variety of consumer goods/services sectors.

Media Content-Creation:

Media content-creation is my favorite portion of the portfolio that I have built over the last five years because it has as much to do with understanding content as a viewer as it does with personal finance. The basic premise behind what I believe makes a successful media company is largely content dependent. Every media company will eventually live or die by the content that it creates. To quote Bill Gates, circa 1996, "Content is king." There simply is no substitute for popular subject matter in the media world and since the demand for it will never diminish, it is the primary aspect by which we as investors must analyze all media stocks, particularly with regards to growth stocks as it is a company's ability to consistently create new and popular content that is of utmost importance.

A media company must display the ability to continuously create and film original content that viewers want to see on a regular basis, so much so that the television networks/film studios themselves become synonymous with the kinds of content that the company creates (think Discovery Channel's synonymy with the "nature program" or ESPN's synonymy with the "sports program"). These types of distinct brand name recognition gives certain media companies powerful advantages over their competitors, namely the ability to lock up specific viewer groups, market content more effectively and keep competitors at bay.

The main driver of growth for the media companies is the powerful trend towards greater content consumption and distribution via new technology platforms. As newer and better-integrated entertainment platforms are made available to more and more viewers, the media companies with the most popular content stand to benefit immensely. The following is a brief breakdown of the three companies that I own in the space and why:

Discovery Communications, Inc. (DISCA): Through its expanding network lineup, including its flagship television networks Discovery Channel and Animal Planet, Discovery Communications has a lock on the documentary-style nonfiction television show. With very few direct competitors, strong subscriber numbers and high viewer retention rates, Discovery is a well-positioned leader in television broadcasting.

Most notably, the company is seeing both revenue and market share growth in its domestic and international markets. Overall viewership numbers across the company's U.S. networks grew 3% in the first quarter, led by Discovery Channel (up 10% in Q1) and Animal Planet (up 6% in Q1). Even the company's much maligned OWN network, a thorn in the side of investors for years, is seeing improvements as its key demographic viewership numbers grew 3% in the most recent quarter. International subscriptions grew a healthy 12% year-over-year, led by significant growth in Latin America, India and Russia and overall viewership numbers grew 16%. The company's recent acquisitions of the French sports network Eurosport and ProSiebenSat's 12 Nordic Channels only strengthen Discovery Communications' global footprint and should provide additional streams of revenue from both new geographic markets and new content markets (sports and scripted drama).

Future Growth and Valuation:

Company

DISCA

Projected Revenue Growth (2013)

23.7%

Projected EPS Growth (2013)

34.7%

Projected Revenue Growth (2014)

10.3%

Projected EPS Growth (2014)

25.7%

P/E (TTM)

31.16

P/E (forward)

18.19

(Numbers from Yahoo Finance, as of 5/8/13)

Investors interested in Discovery Communications may also want to consider Scripps Networks Interactive, Inc. (SNI), a media company very similar to DISCA in terms of approach to content. Scripps Networks' brand of content, which it refers to as "lifestyle media," is geared remarkably well toward specific target audiences and as such, the company controls a large portion of the "how-to" lifestyle television segment with very little competition. For more information on Discovery Communications and Scripps Networks, including both companies' ability to capture and retain key target audiences, refer to my previous article, Scripps Networks Vs. Discovery Communications: 2 Great Media Growth Opportunities.

The Walt Disney Company (DIS): Although a highly diversified entertainment giant that operates a large parks and recreation division, Disney is fast becoming the world's undisputed king of content with an ever-growing lineup featuring some of the biggest brand names in the business, including ESPN, Pixar, Marvel and the recently acquired Lucasfilm. With brands that seem to only grow in popularity, Disney seems poised to continue to expand its already massive reach through both organic growth of its increasingly popular entertainment properties and methodical acquisition.

Considering Marvel's Phase 2 program only just began, and began with the second highest movie opening ever, Disney's superhero division is still in the early innings of explosive growth, as the studio has planned all the way up to and including Phase 3. The new movies planned include "Thor: The Dark World" (2013), "Captain America: The Winter Soldier" (2014), "Guardians of the Galaxy" (2014), Marvel's "The Avengers 2" (2015) and "Ant-Man" (2015).

The recent addition of Lucasfilm has brought news that Disney aims to release a new trilogy of the popular Star Wars movies as well as separate, standalone movies that take place in the Star Wars universe. Management at Disney expects to release a Star Wars movie every year starting in 2015, which would take the full release schedule all the way out to 2019. Additionally, Disney is planning a massive video game strategy for the Star Wars universe as well, as the company recently announced a major multi-year deal with video game publisher Electronic Arts inc. (EA).

Future Growth and Valuation:

Company

DIS

Projected Revenue Growth (2013)

6.8%

Projected EPS Growth (2013)

6.1%

Projected Revenue Growth (2014)

12.7%

Projected EPS Growth (2014)

12.7%

P/E

21.26

P/E (forward)

16.9

(Numbers from Yahoo Finance, as of 5/8/13)

An additional positive note worth mentioning about Disney is that the company currently pays an annual dividend of $0.75, equal to a yield of approximately 1.2%. The company has been aggressive in raising the dividend as of late, averaging an annual dividend growth rate of 29.8% over the last three years, which is up noticeably from the company's 5-year and 10-year average annual rates of 17.9% and 14.5%. With a payout ratio of only 24%, there is most likely room for consistent dividend increases going forward.

Time Warner Inc. (TWX): As a global media company with powerful brands such as CNN, Cartoon Network, TBS, TNT, HBO, Cinemax, Warner Bros. Studios and DC Entertainment, Time Warner is about to become solely focused on its networks and television/film segments, as the company has announced plans to spin off its publishing division Time Inc. at the end of 2013. Soon to be divested of the lagging publishing unit, which saw revenues decline 6.5% in 2012, and with a direct focus on it's largely successful "Networks" and "Film and TV Entertainment" divisions, Time Warner appears dedicated to fully developing and maximizing the reach of its most popular properties both domestically and internationally. CEO Jeff Bewkes recently explained, "A complete spinoff of Time Inc. provides strategic clarity for Time Warner Inc., enabling us to focus entirely on our television networks and film and TV production businesses."

With the recent critical and commercial success of HBO's impressive lineup, including most notably "Game of Thrones", which draws in 13 million viewers per episode, the company's premier network is most likely just heating back up. Early indications are that management at HBO has five more seasons planned for the blockbuster fantasy series. Additionally, hit series "Boardwalk Empire" and "True Blood" are slated to return later in the year along with several new pilots.

The DC Entertainment portion of the company is interesting as well, as the upcoming mega-release of "Man of Steel" is about to happen, with the rumored "Justice League" movie still in the distance. It is apparent that Time Warner's DC division is taking a cue from Marvel Studios and the massive success that lineup has brought Disney.

Future Growth and Valuation:

Company

TWX

Projected Revenue Growth (2013)

3.5%

Projected EPS Growth (2013)

12.2%

Projected Revenue Growth (2014)

4.5%

Projected EPS Growth (2014)

16%

P/E

18.77

P/E (forward)

14.3

(Numbers from Yahoo Finance, as of 5/8/13)

Similar to Disney, Time Warner pays a healthy dividend, currently $1.15, which is equal to a yield of approximately 1.9%. Time Warner has also grown its dividend over time, although the growth rates are not as impressive as Disney, up 34.7% in total over the last three years, which is equal to an average annual rate of just above 10%.

All three of the listed media companies have solidly outperformed the general indices over the last year. Below is a comparison of the their respective performances compared to that of the S&P 500:

Company/Index

DISCA

DIS

TWX

S&P 500

1-Yr. Return

42.46%

49.86%

69.53%

19.01%

(Numbers from YCharts.com, as of 5/8/13)

Media Content-Creation Summation:

There is a reason that companies like Netflix, Inc. (NFLX), Amazon.com Inc. (AMZN) and Google Inc. (GOOG), via its YouTube property, want to make inroads to original content and its because the content itself is essential. An advanced platform for distribution is useless if there is nothing of substance for the viewer to consume. It's one thing to create original programming material but it is another thing entirely to create programming that viewers want to see on a continual basis. Discovery, Disney and Time Warner have shown that they have the rare ability to create high quality, original content consistently. Furthermore, each aforementioned company is well diversified in content offerings and not overly dependent upon one or two networks or film divisions.

All three media companies, four if you include Scripps Networks, are well positioned, from a content perspective, to benefit from the increasing demand for popular programming from cable providers like Verizon Communications Inc. (VZ) and streaming companies like Netflix and Amazon. The trend towards increasing consumption of media content is here to stay and Discovery Communications, The Walt Disney Company and Time Warner all look set to continue riding the growth trend to success.

Payment Solutions:

While slightly less interesting than media content, the portion of my portfolio dedicated to payment solutions has been no less consistent. Much like the media industry, the payments industry is in the process of dynamically shifting. Not surprisingly, the two industries are moving towards a similar paradigm: increased consumer interaction via new technologies, specifically mobile platforms. In the form of payment solutions, consumers now have many ways to pay for products, both in-store and online. In addition to the widely accepted credit/debit card offerings from MasterCard Incorporated (MA), Visa Inc. (V), American Express Company (AXP) and Discover Financial Services (DFS) consumers now have the ability to use nontraditional but secure services like eBay Inc. (EBAY)'s PayPal or Square Wallet to make payments or transfers.

Both credit cards and newer technologies like PayPal have expansive opportunities to grow across the world. Just last September, MasterCard President and CEO Ajay Banga explained that a staggering 85% of the world still uses cash or checks for financial transactions. Even domestically, CEO Banga explained the ratio of paper/electronic transactions was still only 50-50.

With regard to services like PayPal, which still drives major volumes for the credit card processors, there is equally impressive opportunity for growth. At the company's most recent investors conference, eBay President and CEO John Donahoe explained that the company expects its PayPal segment to increase revenue approximately 70%-88% over the next three years, generating an estimated $9.5 billion to 10.5 billion in revenue for 2015.

The following is a brief breakdown of the three companies that I own in the space and why:

MasterCard Incorporated and Visa Inc. : As the two payment industry leaders, MasterCard and Visa are highly efficient, cash generating businesses. With exceptional balance sheets and best-in-breed business fundamentals, both companies have consistently operated at extremely high levels amidst great economic uncertainty. Gong forward MasterCard and Visa, although in direct competition with one another, should be able to wield their considerable influence and strategic prowess to enter new geographic markets, many of which remain largely untapped for plastic. For a more comprehensive look at both MA and V, refer to my previous article, MasterCard Deserves All The Credit, And Your Money.

Future Growth and Valuation:

Company

MA

V

Projected Revenue Growth (2013)

11.3%

11.1%

Projected EPS Growth (2013)

15.2%

20.3%

Projected Revenue Growth (2014)

12.1%

11.3%

Projected EPS Growth (2014)

18.5%

16%

P/E

24.25

50.26*

P/E (forward)

18.38

20.71

(Numbers from Yahoo Finance, as of 5/8/13)

* Reflects one-time settlement charge in 2012

Investors interested in MasterCard and Visa should also consider both American Express Company and Discover Financial Services, both of which operate in similar segments but have much lower valuation metrics and higher yield to go along with their less robust growth rates.

eBay Inc.: As a global leader in both ecommerce and payment solutions, eBay is a more diversified alternative to the credit card processors. In addition to operating its namesake auction site, eBay.com, the company operates a global payment segment, consisting primarily of the PayPal unit and related services. Through seamless integration of PayPal on all of eBay's auction/retail sites and on mobile devices as well as a partnership with Discover Financial to open up millions of retail locations to PayPal users and issue PayPal cards, eBay is set up for continued long-term growth in the payments industry. For more a more detailed analysis of eBay, refer to my previous article, eBay: A Compelling Buy On Recent Weakness.

Future Growth and Valuation:

Company

EBAY

Projected Revenue Growth (2013)

16%

Projected EPS Growth (2013)

16.1%

Projected Revenue Growth (2014)

16.7%

Projected EPS Growth (2014)

17.9%

P/E

26.68

P/E (forward)

17.02

(Numbers from Yahoo Finance, as of 5/8/13)

Similar to the media companies in my portfolio, the payments-related companies have all outperformed the general indices by a wide margin over the last year. Below is a comparison of their respective performances compared to that of the S&P 500:

Company/Index

EBAY

MA

V

S&P 500

1-Yr. Return

37.13%

27.04%

51.26%

19.01%

(Numbers from YCharts.com, as of 5/8/13)

Payment-Solutions Summation:

Similar to the media content-creation segment, there are a number of solid growth stories in the payments segment, some are suited to more aggressive growth investors while others are better suited to slower growth/higher yield investors. However, all are viable plays on a growth trend that appears to be nowhere near its end. As the ways in which consumers are able to shop multiply, so are the ways in which they are able to pay for goods and services. MasterCard, Visa and eBay's PayPal unit are on the forefront of this remarkable change in consumer spending habits and all three companies should continue to benefit from the growing trend.

Conclusion:

This recent portfolio analysis has been helpful for me as it has me considering other large trends that have developed or may be in the process of developing. I believe finding and understanding overall trends in the equity markets sets investors up well for anticipating future growth.

Acting on the trends that an investor finds is a different story. Since I am primarily seeking long-term growth, I have weighted my portfolio towards the sectors/industries that I believe can best provide that kind of growth with relative consistency. The downside is that it has tilted my portfolio heavily towards only two segments. However, as long as those areas continue to outperform the general indices, my growth portfolio should outperform as well. While I certainly can't recommend growth investors position themselves heavily towards a specific sector/industry, I can recommend investors at least consider the content-creation and payment-solutions segments for future growth. I believe the growth stories for both the media content-creators and payment-solutions providers will remain viable well into the future and the quality stock offerings in each segment are plentiful and diverse.

Anyone interested in all of the current stocks in my portfolio can view my Seeking Alpha profile description, where I update the positions and their relative size monthly. I am especially interested in hearing any thoughts and opinions from readers regarding the way I have structured my growth portfolio. Will it continue to outperform going forward?

Source: Content-Creation And Payments: 2 Growth Trends Driving My Portfolio Forward