DirectTV is nearing an all-time high — pushing a major resistance level: shares closed at $39.77 Wednesday, up 4 percent over the last five days and 57 percent over the past 12 months.
One factor driving DTV higher: it's a pure play investment in the returning NFL season.
Expectations are high for DTV selling access to the new football season. The leading satellite TV operator just announced it will make its NFL package available to non-subscribers starting on September 12. Customers who can't get satellite reception can shell out $350 for "NFL Sunday Ticket." This gives DirecTV access to a whole new slew of subscribers who may not want to switch from their cable provider or Verizon Fios . A new "To Go" option will give subscribers access to games via their iPhones.
Heavy hitters started betting on DirecTV before this NFL news: the stock topped the buy list of three of the top five media-focused mutual funds in the second quarter. Capital Research Global Investors, Gordy Crawford's $210 billion fund, bought nearly 17 million shares, Fidelity's parent, FMR Corp bought 5.8 million shares in the quarter, and Janus Capital Management bought 2.86 million shares, growing its stake to 5.6 million.
What's the long-term play?
DirecTV has managed to consistently add subscribers while its rival Dish posts disappointing results. Investors like the fact that DirecTV has authorized $2 billion in stock repurchases after buying $1.72 billion in stock in the last quarter. Plus, DirecTV is pushing forward into 3D TV — it was the first broadcaster to launch the first all 3D channel in July.
Next week DirecTV is presenting at Bank of America Merrill Lynch's Media, Communications & Entertainment Conference — we'll be looking out for an outlook on the business.
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