At long last. Here it is.
I said last Monday when I started writing TradeSmith Daily that I had a terrific reopening stock.
But then I got excited about banking stocks and Warren Buffett.
This happens from time to time.
When you have a technology platform as robust and informative as TradeSmith, it’s easy to get distracted.
The challenge is to take so many FANTASTIC ideas and find real conviction.
Today, I have it for you on a silver plate. And it all starts with a clear signal from TradeSmith.
This company is one of my favorite entertainment companies in the world.
Let’s dive headfirst into this pick with “Big Ears.”
Wall Street is Bullish
Conviction requires a lot of diligence.
So, let’s take a look. This Netflix opponent has Wall Street acting extremely bullish.
Shares of this company are trading under $186.
The last five price targets from analysts put the stock north of $220.
That’s an 18% upside minimum.
And that target might be underselling the potential here.
The technical looks beautiful with an 80% momentum push over the last year.
Its 20-day moving average is above the 200-day moving average. On the fundamentals, its asset growth over the last 12 months is green.
And when COVID-19 hit this stock, it pivoted as one of the best success stories in 15 years.
I’m very bullish about Walt Disney (DIS). And to me, this is the type of stock that belongs in your “forever” portfolio where you could literally hold it forever and know they’ll always have the right model!
The stock sits square in the Green Zone (our buy signal), and it’s continuing to be a strong momentum play. It’s in the Best of the Billionaires, our Low Risk Runners, and Sector Selects.
So, after this year’s run, why does TradeSmith show so much upside?
Let’s look at the details.
The Stream Dream Team
If you remember, 2019 was a banner year for Walt Disney. Its studios had all six of the most successful movies of that year.
As we know, the closure of movie theaters was an ugly story for this industry.
But Walt Disney’s stars aligned with the launch of Disney+.
There were many questions about Disney+ at the time of its launch.
“Another streaming service?” people whined with the inception.
Well, the numbers don’t lie. Disney+ has already surpassed 100 million subscribers.
Remember that they hadn’t projected that they would reach 90 million subscribers until 2024, when the service initially launched.
Even more amazing – customer loyalty and satisfaction are already on par with Netflix, the original streaming giant, and which so many other services imitate.
No one batted an eye when Disney+ raised its prices, and there are likely a few additional price increases in the future. Combine Disney+ with its success of ESPN+ (backed by its Ultimate Fighting Championship partnership) and its stake in Hulu, and you’ve got a solid source of cash flow for the foreseeable future.
Disney+ isn’t slated to turn a profit for another two years, but that doesn’t appear to matter right now. The company predicts 260 million subscribers now by 2024, which is nearly three times the original projection.
And let’s face it. Giant streaming services are all about building up their customer pipelines and future subscription-based revenue.
And Wall Street just loves subscriber growth and subscription plans.
Disney+’s massive library complements a new business model that will allow it to continue to charge people $30 to stream films at home.
And if you think that $30 for a film is too much, don’t be surprised how the company monetizes its Star Wars franchise. There is a distinct possibility that it focuses on content development at a higher price point for the more engaged fanatic who would pay the same prices for a film as they do for concert or sports tickets.
That just feels like a matter of time.
It’s Time to Reopen
Meanwhile, let’s not forget that Disney has multiple parks here in the United States opening for business.
The pent-up demand for Disney is already brimming.
Recently, a man was arrested and thrown off Disney property for refusing to conduct a temperature check. He complained that he paid too much money to be arrested.
He’d spent $15,000 on a Disney vacation.
The funny thing: There are probably 50 to 100 people who would gladly take his spot.
Analysts are now expecting record profits at the park when traffic returns to pre-pandemic levels.
Disney’s resilience throughout COVID-19 warrants significant optimism for the company moving forward. The studio will return to the big screen with several films from its Star Wars, Pixar, and Marvel Studios.
The catalysts for Disney look better than almost anyone right now.
People are talking about hotel stocks as a great buy. Disney owns hotels.
People are hyping sports and entertainment stocks. Disney owns ESPN and the greatest treasure trove of entertainment intellectual property on the planet.
People are talking about restaurants, travel stocks, cruise lines, and retail plays.
Disney is involved in all four of these industries, as well.
It would be hard to find that “reopening” industry that Disney doesn’t have a leading position in today. And that includes educational technology – they do have a magnet school in Chicago.
Disney is a top reopening pick… and anything up to $190 a share is an attractive entry price.