Long-term investing with Walt Disney (DIS; NYSE).
The company needs no introduction. Who doesn’t know Disney? From early childhood well or poorly we have all had “contact” with their products, mainly cartoons. But today Disney is no longer just that; it has evolved a lot. It has become an empire with 4 major divisions. The Studio division (film, music, etc.), Parks and Experience, Media and International.
During the pandemic the stock was put to the test, losing about 50% from its highs. The recovery was definitely strong as it recovered 60 percent from its lows from April to September .
When we consider that Disney kept its theme parks closed for a very prolonged period of time and no longer released movies on the big screen because of the pandemic, this “recovery” of the title would seem very anomalous, almost miraculous.
But no.
How, then, did Walt Disney save himself in a lockdown period? Thanks to streaming.
Disney’s new creature is Disney +, a service very similar to Netflix that has reached 134 million users in just a few months. The service costs 6.99 euros per month, and it is he who largely saved Disney. A few days ago Disney’s forecast came out and the stock skyrocketed. The outlook by 2024 for the streaming industry (which includes Disney +, ESPM + and Hulu) is to reach 350 million subscribers.
Figures to which Disney could arrive brilliantly by scaling its “new” business by raising the price of the service by a few dollars.
So, is it appropriate to invest for the long term with Walt Disney? The future no one can predict. Undoubtedly from the company’s fundamentals and the investments and goals it has set for itself within a business that looks like it can only grow, one would think that Disney is just beginning to climb the ladder and the streaming sector will become the company’s primary driver .
The direct-to-consumer and International sector (the one that includes streaming services) was up 41 percent from the previous year, bringing Disney $4.9 billion in revenue out of $14.7 billion total.
It is worth mentioning that The Walt Disney Company, after purchasing all the media assets of 21stCentury Fox in 2019 for $71.3 billion, became the largest entertainment company on the planet.
market capitalization is $164 billion. In 2019 it had revenues of $69 billion with net income of about $9 billion.
Walt Disney is thus a company with fundamental money and in a growing industry. Next year there will be a new streaming offering that the company is studying in order to expand its subscriber base, which is already growing.
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