By Nigam Arora & Dr. Natasha Arora
At The Arora Report, we have created a large number of innovations that have led to our unrivaled performance. One of the innovations is buy zones. Disney (DIS) stock illustrates the power of the buy zones. DIS stock dipped into the Arora buy zone at the height of the pandemic fears. At that time we got a large number of emails questioning our buy zone. On the surface the emails made sense – after all, it was prudent of investors to question buying Disney when the parks were shutdown, movie theaters were closed, cruises were stopped, sports were canceled (DIS owns ESPN) and DIS was spending enormous amounts of money on developing a streaming product without any guarantee of success.
We stood by our buy zone because our algorithms have been proven over a very long time and the success of the algorithms over thousands of trades provides the confidence. Those who follow the system scaled into DIS with an average of about $80. DIS is trading at $184.82 as of this writing. This represents a gain of 131%. DIS is in the Core Model Portfolio.
Earnings
DIS reported earnings better than the consensus and whisper numbers. Wall Street is going gaga over DIS earnings without digging deep. The main driver of the stock is the number of new subscribers to Disney+. Wall Street is excited about the addition of 12.4 million new subscribers to Disney+. Most analysts have not picked up on the following two facts:
- Subscriber growth in developed markets is slowing.
- A big part of the growth is coming from India. Growth in India is good but the average RPU is only about $0.50 per month.
For the foregoing reasons, there is a change in the Buy Now rating and the buy zone is not being moved as high as would be dictated by the earnings headline.
The Most Powerful Media Company
Our call is that in the very long term, DIS is likely to become the most powerful media company in the world.
Zones
For those following the Good Way, the Buy Now rating is being changed to 🔒 (To see the locked content, please take a 30 day free trial)
For those following the Best Way, the new buy zone is 🔒.
The recommended position size is 🔒.
The very long term target zone is 🔒.
What To Do Now
Those in the stock may consider continuing to hold.
Those not in the stock may consider following the parameters given above.
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This post was just published on ZYX Buy Change Alert.
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Nigam Arora
Nigam Arora is known for his accurate stock market calls. Nigam is a distinguished master of the macro. He is a popular columnist with over 100 million page views, an engineer, and nuclear physicist by background. Nigam has founded two Inc. 500 fastest growing companies and has been involved in over 50 entrepreneurial ventures. He is the developer of Theory ZYX of Successful Change Management and is the author of the book on Theory ZYX, as well as the developer of the ZYX Change Method for Investing.
Dr. Natasha Arora
Dr. Natasha Arora has significant expertise in investment analysis especially biotech, healthcare, and technology. Natasha is a graduate of Harvard Medical School followed by a postdoc at MIT. She has published several peer reviewed research papers in top science journals.
