3 reasons why I raised my stake on top streaming stocks Walt Disney!

On share of Walt Disney (WKN: 855686) I increased my ante again. To me, it’s a top streaming stock, but also one that has tremendous quality. It has not only been a high-flyer for a few years.

Let’s look at three reasons why this might be a good time. Maybe a good, favorable chance also opens up for you after reading my lines.

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Walt Disney: Buy when nothing goes right anywhere!

Walt Disney is making progress in reviving the amusement parks after Corona. And admittedly, summer should bring additional positive aspects and small print. At the moment, however, we are in a market phase where things are not going really smoothly anywhere.

Walt Disney is better than Netflix when it comes to user growth. However, a significant part of the growth comes from Greater India, where Disney +, for example, is bundled with other local content and revenue generation is below average. Anyway, streaming, technology and growth segments are not in demand at the moment.

Amusement parks are also working on the turnaround. Therefore, the following applies: There is no clear business area that the broad market is currently celebrating. Therefore, the stock has also fallen to a stock price of around 100 euros. A good time for me to go up again.

Intact business models available

Do neither amusement parks nor streaming investors get on their feet? Let’s put it this way: Those are the two reasons I bought Walt Disney now. Ultimately, it’s about taking advantage of these two strong business areas in the long run.

Walt Disney generated $ 26 billion in revenue and a lot of free cash flow from its theme parks before the single-year pandemic. A return to this base is not only possible. With pricing and high demand in reopening environments, a new record year seems possible to me.

Streaming is still intact with Disney +, Hulu and ESPN + and over 200 million subscribers. Yes, the division continues to grow moderately. In the future, I therefore see a large, profitable media and leisure group that will enable solid returns and growing free cash flows in the long term. Above all, the power of amusement parks as a provider of cash flows should not be underestimated.

Walt Disney: Really Cheap!

Finally, Walt Disney shares are simply cheap. If we compare “normal” 2019 earnings per. stock at $ 6.68 with the current stock price of $ 108.69, we have a price-to-earnings ratio of less than 16.3. It may take another three or four years to get back there. Also because management needs to invest in additional content to build the streaming segment.

But still: a price-to-earnings ratio of 16.3 is not too expensive for these two strong business models. That’s why I kept investing in Walt Disney. I think valuation is cheap and the opportunity is huge with a long term perspective.

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Vincent owns shares in Walt Disney. The Motley Fool owns shares in and recommends Walt Disney and recommends the following options: long January 2024 $ 145 call at Walt Disney and short January 2024 $ 155 call at Walt Disney.

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