How to Buy Disney Stock | Brief History of Disney Stock
We can all recognize Mickey’s big ears and hum the opening theme of The Lion King. However, Disney is much more than a colorful entertainment company for children. It is an extremely successful company, which makes DIS a favorable trading instrument. Today we explore everything you need to know about Disney stocks, including six main reasons to buy Disney stocks in 2020.
Brief History of Disney Stock
Dinsey’s long success story began in 1923 with an animated short film about Alice’s Adventures In Wonderland. Later, in 1937, Snow White and his dwarves brought an unprecedented amount of Fame to the company, which has not been reduced since then.
In November 1957, DIS shares were listed on the New York Stock Exchange. But interest in buying Disney shares didn’t really recover until the late 20th century. DIS started at about $ 10 per share in 1990 and tripled over the next decade, landing at $ 31 in January 2000. The next ten years were somewhat uneventful for stocks, with an insignificant jump to $ 20 during the ’09 crisis. But as 2012 came, DIS began to pick up.
With Pixar already acquired (2006) and Marvel (2009) in the manga, Disney took over Lucasfilm in 2012, becoming an owner of virtually every beloved animated character. The Star Wars franchise gave DIS a good boost, bringing it to $ 105 per share in 2015. The last acquisition before the COVID-19 pandemic in 2020 was the purchase of 21st Century Fox in preparation for the launch of Netflix’s direct competitor, Disney+.
At the time, DIS was sitting at $ 147 per share in December 2019 with a record high of $ 151.64 on November 26, 2019. Prior to the Pandemic, The Walt Disney Company faced an annual income of nearly $ 70 billion, with 37% of that coming from Parks and resorts around the world.
Disney Stocks recent performance
Disney Stocks recent performance
And then the planet was hit with the annoying Coronavirus, throwing thousands of small and medium-sized businesses completely off its track. Disney, being a corporate giant, was able to stay a little better through salary cuts from senior executives and raising capital from debt markets.
However, the fall was still very visible. In the second quarter of 2020 Disney recorded a net profit of $ 475 million, a decrease of 91% over the same quarter last year. Restrictions on public entertainment put a big lock on famous Disney Parks and the cancellation of sporting events that affected ESPN made it even worse.
The parks began to open when summer came, starting with Shanghai’s Disneyland in May 2020. As the entries were sold out immediately, experts made a number of assumptions that DIS will not suffer as much as most other large companies. The absolute minimum for Disney shares during global isolation was $ 85 in March and by the time August began, the shares were nearly recovered at $ 127.
By being able to present a good portion of its product online (Disney + and Hulu), Disney has reached its initial target of 50 million subscribers by the end of 2020 in May. This is reflected in sales growth of 272% during the second quarter. In addition to that, Disney also exhibited some notable practices during the crisis. This gave him a good amount of bonus points in the eyes of international investors.
Now, as much as in the last 20 years, DIS is among the leading media companies operating in the stock market. Which means this may be the best time to buy Disney stock.
Dividends from the purchase of Disney shares
The company’s revenues were not the only ones who fought for the pandemic. The reduction in the value of Disney’s shares buy also significantly slowed its momentum. Once again, the real lifesaver was the online presence and diversity of products and services that contribute to the value of the company.
But even with the positive outlook for the future, Disney shareholders were unable to receive their semi-annual dividends as one of the anti-crisis measures. DIS dividends grew gradually in recent years, so the postponement of dividends was definitely an unfortunate circumstance.
Other well-known investors involved in a similar activity were David Einhorn of Greenlight Capital, George Soros of Soros Fund Management and Dan Loeb of Third Point. Judging by this alone, it is already safe to say that buying Disney shares in 2020 is a relatively promising activity. But before we go ahead and invest, let’s first discover some of the technical aspects related to the purchase of Disney shares.
Technical analysis of DIS
We already see the increase in Disney shares from 1990 to the end of 2019. From what you saw earlier, we can directly connect the technical data with the stock price response on the chart. For example, just before the pandemic, when the release of Disney + was announced, the chart made a visible leap up. The same happened after the aforementioned acquisitions of Marvel and Lucasfilm. So what does it tell us about why buy Disney stock now?
Disney’s expansion style is not particularly subtle. Similar to the social media giant, Mickey’s ears deal with competition by buying it. Pixar is the best example of all. Therefore, although it may be too early to judge which companies will pounce under the roof of the DIS then, we can absolutely agree that their progress is well accounted for and large in terms of expenses.
The third quarter of 2020 began on a positive note for Disney shareholders. Volume and momentum are approaching pre-crisis numbers, showing that traders around the world have not lost their faith in stocks. Which brings us to the next point: what are the main reasons to buy Disney stock in 2020?
6 Reasons to buy Disney stock in 2020
An experienced trader will not even question the idea of buying Disney stock. However, beginners might be confused about why DIS is a good choice among many other decent performance solutions, such as NFLX or GOOGL. That’s why we came up with six main reasons why you should buy Disney stock in 2020:
Reaction to the crisis. We’ve already mentioned it a couple of times, but Dinsey handled the interruption of the pandemic relatively well. Of course, it may be due in large part to the timely launch of your exclusive broadcast service. But we should not cancel other measures that were taken, such as the issuance of debt securities that totaled $ 6 billion.
Diverse business model. If you can’t imagine how much Dinsey controls, here’s a brief guide. Mickey has bitten off large pieces of industrial empanadas in film, television, radio, theater, music, games, finance, consumer goods, real estate, parks and publications. Some of the companies under Disney, which you didn’t know were his, are GoPro, National Geographic and ABC (American Broadcasting Company).
Forward-thinking mentality. The release of Disney + just before everyone is locked up could easily have been a basis for conspiracy theories, had Disney not been known for its forward-looking vision. Usually they are not afraid to experiment and make jumps to unknown territories. That’s why Disney is not only one of the largest media companies, but also has a large presence in the world of real estate and publishing.
Heading east. Disney’s introduction to the Chinese market was not just about improving profits. Adapting to attract Oriental consumers showed great levels of economic orientation and ability to yield globally. For Asian investors, this has become a sea of trading opportunities both inside and outside the region.
Loyal consumers. Any fan of Disney park will confirm that the price of the ticket to one of Mickey’s amusement centers is worth every penny. This means that even if the price goes up, the number of customers who pay happily will not decrease. For example, joining the world of Disney went from $ 67 in 2006 to $ 109 in 2019 (or $ 169 for the option to jump between parks), with virtually no improvements in park amenities. In addition, visitors are not at all irritated by long wait times and general overcrowding, as it is considered part of the experience. Experts say that if Coronavirus measures of limited capacity remain for an extended period of time, prices will grow higher, but visitors will definitely pay.
The risk of buying Disney stock
Another factor to consider is the reduction in revenue for most Disney consumers. The bulk of the world’s population ran out, faced temporary cuts and was paid less. This resulted not only in the reduction of payability towards expensive entertainment, but also in the possible abandonment of broadcast subscriptions. Although a drastic reduction is highly unlikely, experts advise investors to look at the statistics and act accordingly.
Finally, shareholders could be presented with another delay in dividends at the end of the year. A whole year without pay is absolutely unprecedented, once again so are the terrible events of 2020.
Disney Stock how to buy
Every time you are looking to expand your portfolio there is a set of steps to follow. First, decide where you will buy the shares. In the case of Disney shares how to buy options, there are two ways to do it: buy directly from the company or buy through a broker. Although buying directly from Disney might appear as a more direct solution, there are a lot of things to keep in mind. Mainly, it is the tariffs and investment requirements you will face, starting with the initial price, which will be higher than in the live market.
Brokers, on the other hand, provide an easier way to buy Disney shares. There will be little or no fee, as well as a good selection of support tools that can help you in the process. Since most well-established brokers are sincerely invested in their success, both will be able to buy Disney shares and learn all about how to buy them in the same place.
We have already covered a good amount of information about DIS trading, but you will definitely need to dig deeper to be profitable. In case Disney is the first instrument in your portfolio, start with the basics and learn the difference between technical and fundamental analysis. Sentiment also plays an important role in how Disney’s value progresses (i.e. the price increase after Marvel’s acquisition), so keep your hand on the pulse of currents and trends inside and outside the industry.
The next question to answer is how many Disney shares to buy. Individual stocks are always a bit of a pain to buy, compared to mutual funds or ETFs (publicly traded funds). Because to build a properly diversified portfolio consisting of individual stocks, you will need to conduct a thorough investigation of dozens of them, before landing in 10 or 20 companies. This should not prevent you from buying DIS entirely, as it is both a solid instrument and a great educational tool. Just be sure to limit the individual stocks in your portfolio up to 10%, focus on long-term strategies, and fill the rest of your portfolio with ETFs.
And there you go. Now, all that remains to be done is to choose a trading strategy and place your first order. Of course, inexperienced traders may experience a lot of confusion before making a decision, but once again the free educational materials provided by the broker will be useful. Just before we finish, we will quickly discuss the option of trading Disney shares through CFDs.
The benefits of trading CFDs
CFD stands for a difference contract, and is a very popular trading tool because of its leverage opportunities. CFDs perfectly mimic the stock trading process, with some subtle differences. The first, of course, is that the contact of difference is not actually an action. This means that owning it will not make you a shareholder and give you the right to make decisions in the company’s management process. At the same time, however, you can sell and buy assets without physically delivering them.