Top Picks 2020: Disney (DIS)

01/23/2020 5:00 am EST


Timothy Lutts

Publisher, Cabot Heritage Corporation

Everyone knows Disney (DIS), which is our Top Pick for conservative investors; the blue chip company is famous for its theme parks, movie brands and various media properties, suggests Timothy Lutts, editor of Cabot Stock of the Week.

The stock also offers a dividend of 1.2%. But the real driver of Disney today is the firm’s online properties — and the big attraction today is Disney+, the recently launched streaming platform.

Disney+ contains all of the company’s films (including Pixar, Marvel and Star Wars), myriad TV shows (including The Simpsons and various National Geographic and Disney Channel shows) plus some original content; The Mandalorian, a new Star Wars series, is the most streamed show in the U.S.

Plus, the company controls Hulu and ESPN+, both of which are being offered in a package with Disney+ (just $13 a month for all three).

The stock broke out of a four-year consolidation in the spring when the plans and forecasts for Disney+ were announced, and the stock had a decent run after that. But then it fell into a correction in August and September, falling back to its breakout level and its 40-week moving average.

However, when Disney+ was launched, that brought the buyers back in; the stock rallied seven weeks in a row to new highs before easing into December. I think DIS is a good buy right around here as it gathers strength for its next move higher.

(Editor's note: Tim Lutts' Top Pick for speculative investors in 2019 was Innovative Industrial Properties (IIPR) — a REIT in the cannabis sector. The stock rose 73% last year and he continues to recommend the stock for those seeking relatively low risk exposure to the cannabis industry.)

Subscribe to Cabot Stock of the Week here…

Related Articles on CONSUMER