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  • Writer's pictureIshfaaq Peerally

Time To BUY DISNEY STOCK? 10 million Disney+ Subscribers in one day ๐ŸŽฌ

The markets open higher today and the S&P 500 $SPX500 reaches ATH with news of a trade deal coming soon(we have heard this so many times now). Anyway, our portfolio doing as good as the market with Skyworks Solutions $SWKS , Apple $AAPL up with the trade deal news. Our oil $OIL stocks Concho Resources $CXO and Parsley Energy $PE also up. The only stock down significantly is Diageo $DGE.L with the $GBPUSD down as well .

Time To BUY DISNEY STOCK? 10 million Disney+ Subscribers in one day ๐ŸŽฌ

Disney $DIS gained more than 7% on Wednesday after announcing that Disney+ got 10 million subscribers on the first day. It is not just about Disney+, even the last earnings of Disney were wonderful. Disney is the smallest holding in my portfolio at 2.5%. I bought the first shares in 2016 at $97 and I wished I had bought more. I bought in 2016 because the company was not doing that great. 2017 and 2018 were quite boring years for Disney but 2019, has been a great year. There are three main reasons:

1. Most of the recent Disney movies have been doing great

2. The acquisition of 21st Century Fox

3. Launching Disney+

Revenues of Disney are going up. We acknowledge that this is because of the acquisitions. Even assets are increasing at a fast rate but net income and cash flows are decreasing and that's because there are a lot of synergies going on. They are investing now for the future. The loss in cash flow will be rewarded by the great content that they have acquired from Fox.

3 out of the 5 highest grossing movies in history were made by Disney, Avengers: Endgame, Star Wars: Episode VII - The Force Awakens, Avengers: infinity Wars and now they own the rights to the second highest grossing movie of all times, Avatar. Disney also owns ABC network, Pixar, ESPN, Star India and many other franchises. But only 35% of the revenues come from media networks. They have the parks and cruises which brings additional revenues. They are just like Apple $AAPL , they keep you in the ecosystem.

10 million subscribers on Disney+ in one day sounds amazing but it is not as great as Netflix $NFLX which has 158 million subscribers. I don't know if Disney+ can surpass Netflix but they can compete because they can afford to lose money. They have over 95 years of content available to show on Disney+ while Netflix, Apple $AAPL , Amazon $AMZN have to create their own content. Disney also owns 60% of Hulu with controlling interest. They are going to sell Hulu, Disney+ and ESPN+ together in bundles.

For me, I don't see Disney as a good investment right now. It is quite expensive for me. There are much better options available. But now, if you are a beginner or a defensive investor and don't want to do much work researching stocks, I will definitely recommend Disney. It is always a good time to buy Disney. Bob Iger is a great CEO and the company pays a nice dividends. For a defensive investor, Disney is always a good investment. But for the enterprising investor, I believe there are better options out there.

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