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Stocks of Stingray Group Inc. (TSX:RAY.A), a music, media and technology company in Canada, seem to have gained the attention of potential investors. On Monday, July 5, RAY stock was among the top trending stocks in the country.
The sudden interest in the Montreal-based based company could be due to the announcement that Stingray has acquired Calm Radio, reportedly the top wellness-oriented music streaming service.
This acquisition is likely to help Stingray grow its portfolio of curated music content and increase its client base as it enters the health and wellness industry.
The COVID-19 pandemic has increased the stress levels of people across the world. A recent survey on COVID-19 and mental health, for one, revealed that one in five Canadian adults suffered from at least major depressive disorder, posttraumatic stress disorder or anxiety disorder.
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Why is this acquisition important?
Established in 2009, Calm Radio grew at a notable pace over the years. Presently, it has 500 free channels of relaxation, ambience and contemporary music. It also has at least 1,000 premium channels that offer sleep music, guided meditation audios, calming sounds and meditation music.
As the ongoing pandemic continues to induce excessive stress in peoples’ lives, Stingray might boost its prospects with this acquisition and increase its revenues. With this deal, Stingray's subscriber base will also increase by about 30,000.
Since Calm Radio witnessed an 85 per cent year-over-year (YoY) growth in its subscriber base in 2019, Stingray's base could expand further this year.
Stingray's stock and financial performance
On June 29, Stingray stock achieved a fresh 52-week high of C$ 8.15. After closing at C$ 8.11 apiece on Friday, July 2, the stock could climb on the back of the acquisition announcement.
1-year chart of stock performance, volume and moving average multiple of Stingray (Source: EODHD/Others)
In the fourth quarter, Stingray posted a net income of C$ 12.1 million, as compared to a net loss of C$ 8.5 million in Q4 2020.
Stingray scrips returned 48 per cent to its shareholders in the past 12 months and 23 per cent year-to-date (YTD). As the stock seems to be on an upward trajectory, its present price could be used as an entry point by investors looking to diversify their investment portfolio or explore this media stock.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view. The reference data in this article has been partly sourced from EODHD/Others.
