Weird assumptions are being made by investment research firms about slower economic growth and weaker consumer demand. They are discounting the impact of the reopened economy when most signs point to the contrary, observes Jon Markman, editor of Pivotal Point.
One cyclical winner that has all the hallmarks of success is The Walt Disney Co. (DIS). This is a big, well-managed consumer discretionary business. Its theme parks are iconic. And its streaming media business — Disney+ — is growing fast with multiple new revenue opportunities.
Recently, “Black Widow,” its Marvel summer blockbuster, took in $80 million at the box office on opening weekend and another $60 million on Disney+. The latter category didn’t even exist a year ago. That is a prime example of how powerful the digital transformation is becoming.
This dual release hybrid strategy may not be the future of media, yet Disney is the only company globally that can pull it off. It’s a huge advantage over competitors.
Tech stocks have had a great run as investors came to realize those businesses are growing fast. Worries about interest rates never made much sense … yet tech needs to rest. Share gains need to be digested.
Cyclicals are ready to run the anchor leg in this bull move, and Disney is in a great position to lead. Savvy investors should use any near-term weakness as a potential buying opportunity.
