By Colin Cieszynski, CFA, CMT, Chief Market Strategist, CMC Markets Birdman made it two Best Picture winners in a row for 21st Century Fox last night. Although Fox initially failed to capitalize on last year’s win, trading lower in March of 2014, by the end of January, the Dow had posted a return in line with the 25-year average and the Movies and Entertainment sector index had an above average performance relative to the last 25 years with a 15.5% return. Best Picture Winner March Return Winner Dow Yr Sector Yr Winning Vs Return Return Year Studio Sector Studio Sector Jan 31 Jan 31 2000 Dreamworks 13.60% (0.48%) (2.08%) 2001 Universal (9.27%) (3.24%) 6.03% (8.88%) (41.47%) 2002 Universal (0.71%) (3.71%) (3.00%) (18.82%)(32.48%) 2003 Disney (2.17%) (0.24%) 1.93% 30.24% 27.54% 2004 Warner (1.77%) (2.25%) (0.47%) 0.01% 1.38% 2005 Warner 1.56% 1.86% 0.30% 3.58% (7.92%) 2006 Lions Gate (1.31%) 12.40% 13.72% 16.17% 28.00% 2007 Warner 0.29% (3.05%) (3.34%) 0.23% (18.90%) 2008 Disney (3.73%) (3.18%) 0.55% (36.76%)(46.67%) 2009 Fox 12.07% 19.18% 7.12% 25.84% 56.94% 2010 Universal 10.49% 14.54% 4.05% 18.12% 26.46% 2011 Weinstein (1.29%) 6.23% 10.85% 2012 Weinstein 1.82% 9.72% 38.33% 2013 Warner 5.61% 8.47% 2.86% 13.26% 31.35% 2014 Fox (2.38%) (4.68%) (2.30%) 9.34% 15.52% 25 Year Average overall 0.65% 1.53% 1.46% 9.21% 9.63% Source: CMC Markets, Bloomberg L.P. Combining last year with the stellar stock market performance after Fox’s last win in 2009, over a full year, Fox has been the best received winning studio by the sector and the second best performing winner for the overall market, so Fox’s big win last night bodes well for stock market bulls over the next year. We also compared how the sector and broader market fared following wins by studios founded or built by Canadians (Warner, MGM, Lions Gate) relative to Americans (everyone else). The difference in Dow performance was marginal but the sector clearly preferred studios founded by Americans more outperforming on both the one month and one year time frames. Fox winning on this basis also suggests we could be heading into a positive year for both the sector and the broader stock market. March Dow Yr Sector Yr Winning Sector Return Return to Studio Return Jan 31 Jan 31 Warner 1.02% 7.15% 3.38% MGM (2.46%) 10.25% 27.81% Universal (1.76%) (3.24%) (11.69%) Paramount (0.27%) 28.34% 16.71% Disney (1.56%) 6.61% 12.86% Fox 4.84% 17.59% 36.23% Others 3.20% 7.91% 18.77% Canada (0.71%) 8.29% 9.07% US 0.90% 9.55% 12.10% Source: CMC Markets, Bloomberg L.P.