How To Play Disney Stock This Week

The $358 billion Walt Disney Co. (NYSE: DIS) is practically marching toward entertainment industry domination. This past week, the giant announced its Disney+ movie and television streaming service had topped 100 million subscribers.

Looks like the Mandalorian's caught more than Baby Yoda.

For a little perspective: Netflix Corp. (Nasdaq: NFLX) has about 200 million subscribers, but it's been building on that since 2007.

Architecture, Travel, Tower, Old, Building, Disney

Image Source: Pixabay

Now, it's true that since the pandemic started a year ago, most streaming services have seen a healthy and, for the most part, permanent bump in subscriber numbers.

But Disney seems to be in a league of its own.

It was obviously never lacking in the popular films department, but it's been on a savvy acquisition spree for years now, grabbing outrageously lucrative entertainment franchises worth far in excess of $32.6 billion – Star Wars, the Marvel Cinematic Universe, The Simpsons, the Pixar animated flicks, and even National Geographic documentaries.

Still, it's not invincible, and I'm starting to see some signs of weakness that could add up to massive profits for folks on the right side of the trade…


Disney's Momentum Is Beginning to Slide

Disney's many entertainment "tentpoles" have obviously been more than enough to offset the steep losses Disney incurred when it had to shutter its lucrative global theme parks and cruise divisions.

The stock has come up more than 60% since October, without much in the way of revenue from its theme parks. That's like swimming the ocean with one hand tied behind your back.

But, of course, these days, the end of the pandemic is looking closer than ever. Disney has announced its intention to begin a phased reopening of its theme parks in April – more revenue for the money mill.

Investors who were already eager to dive in suddenly see billions more reasons to buy. There's no denying that Disney has had a great run. Since October, DIS has climbed an impressive 61%, even with its parks shuttered.

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Bindi Dhaduk 4 weeks ago Member's comment

So you are basically saying hold off on buying more at this price?