Walt Disney Co (NYSE: DIS)
Walt Disney, the land of happiness, isn’t so happy at the moment. Like most stocks on the open market, this one is having a rough time. The declines are for good reason. Recently, the British people voted to leave the European Union. As a result, we’re seeing major concerns with regard to global economic effects associated with the decision. One of the companies that’s likely to be hit incredibly hard is DIS. Today, we’ll talk about why it’s likely to take such a big hit, why that hit is going to present an opportunity, and what we can expect to see from the stock moving forward.
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Walt Disney Gears Up For Declines
When it comes to stocks that are susceptible to global economic concerns, there are few that are as deep in the category as Walt Disney. The reason for this is simple. At the end of the day, DIS is an entertainment-focused company. The company makes its money from movies, cartoons, theme parks, television networks, and more.
Now, let’s think about it here. When economic conditions are a concern, where is the first place that consumers look to save money? If you answered entertainment, you’re right! Any time consumers are worried about finances, they tend to stop spending so much on entertainment. For DIS, that’s a very bad thing right now.
The truth is that with the Brexit vote showing that the UK will leave the EU, there’s quite a bit up in the air at the moment. As a result, consumers have already started to hunker down and brace for the worst. This means that less people around the world will be visiting Disney theme parks, spending money on their movies, and upgrading to ESPN in their cable packages. All of this will likely hit the company’s revenue incredibly hard.
So, Where’s The Opportunity?
At the moment, it may seem like DIS is a losing bet, and if you’re looking at the short term, you’re probably right. However, in the long term, there’s a tremendous opportunity in the making here.
You see, no other company on the planet seems to be able to capture the imaginations of consumers young and old like Disney. Not to mention, we’ve seen things like this in the past. Any time global economic conditions are called into question, DIS generally takes a dive.
Nonetheless, it’s not the end of the world or the end of the company. As economic conditions around the world improve, history shows that Disney recovers incredibly quickly. As a result, when economic concerns start to fade, we can expect to see big gains in DIS in the long run.
With all of that said, declines at the moment may be concerning to some. However, I see them as an opportunity. By watching DIS closely, making note of support and finding a strong entrance point, you could realize huge long-run gains.
What We Can Expect To See Moving Forward
Moving forward, I have a relatively mixed opinion of what we can expect to see from Walt Disney. In the short run, the stock is likely to see further declines as global economic concerns weigh heavy. Nonetheless, in the long run, I do believe the stock will recover. Based on the history of DIS, there’s no reason to think anything else. So, getting in on the trends once a bottom is found might just be your best bet at generating profit from DIS.
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What Do You Think?
Where do you think DIS is headed moving forward and why? Join the discussion at TalkTRENDZ from CNA Finance!
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