Why is Disney stock falling
3 reasons why I will always hold Walt Disney stock!
Forever is really a long period of time, but I am now convinced that I will hold Walt Disney stock forever. To be more precise, there are three reasons for me why I am so convinced of this investment from a long-term perspective.
Which are they? This is what the following is about. Perhaps afterwards you too are convinced that Walt Disney shares are a candidate for an forever approach. Of course, this is explicitly your decision.Walt Disney share: the cash cow business model
A first reason why I want to hold Walt Disney shares forever has to do with the actual business model. Amusement parks, movie studios, many popular franchises. That sounds like one thing to me: strong cash flows over long periods of time.
Indeed, the US media and leisure company is benefiting from its early investments. As well as his later ones. The management has thus created a cosmos that is possibly unique in the investment world. For me, that is a strong competitive advantage.
How strong the cash flows behind the Walt Disney share are in more solid times, we can see with a look at the figures before COVID-19. The amusement parks alone have achieved a turnover of 26 billion US dollars in solid years, and the trend is rising due to the pricing power. In this way, solid sales, results and free cash flows can be generated in the long term.New growth opportunities
The strong, free cash flows in years that are not affected by a pandemic are the first part of a classic investment thesis for Walt Disney shares. In times of the crash, this could be a reason why one could bet on the share from a value point of view. However, there is another part of an investment thesis, probably a more exciting one now.
Entering the streaming market has long-term growth prospects. The management would like to welcome up to 350 million subscribers to its own services in the next few years. Around 250 million of them at Disney + alone. That shows me: The group could face a re-evaluation.
Here in particular, the future sales potential is gigantic. No question: this segment behind the Walt Disney share could also be a cash cow in the future.Walt Disney share: strong brand!
The Walt Disney share also has another advantage that speaks in favor of the share: namely the strong brand. As a result, the amusement parks alone are likely to be very attractive. Also because people, young and old, want to see their cartoon heroes in real everyday life. Or costumed in the everyday amusement park.
But the success of Disney + could also be based on the strong Walt Disney brand. The Mickey Mouse Group has simply stood for popular content enjoyment and leisure fun for many years and decades. In the future, this should also lead to many consumers relying on services, formats and content for their entertainment options.
The article 3 Reasons I Will Always Hold Walt Disney Stock! first appeared on The Motley Fool Germany.
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Vincent owns shares in Walt Disney. The Motley Fool owns shares of and recommends Walt Disney.
Motley Fool Germany 2021
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