Every Walt Disney movie promises to realise your dreams, to vary your daily routine with a myriad of emotions, and to fill you with experience. In some ways, so does trading. If you happen to be fond of both, we say why not unite these two interests and look into Walt Disney stock?
Just like a well-told story, trading is dramatic, unpredictable and chock-full of dangers, with many different kinds of investment risks.
However, if you are hell-bent on spicing your life up with some trading fun, here’s a short checklist that can increase the chances your deal will have a happy ending.
Know your risks
When it comes to investing, show business stands apart from other industries. It features good-old volatility in the leading role but is directed by risks most traders would find unusual.
Take, for example, movie company stocks in general. Once you have seized a movie investment opportunity, Wall Street may literally lay waste to economic conditions. All you care about is whether this next movie production will turn into a blockbuster or a box-office flop.
In other words, you can close your eye on world politics or economy, because now your returns heavily depend on popular whims. That’s why movie company stocks are often seen as a means of portfolio diversification and risk management.
Choose your business
The entertainment industry provides oodles of content, ranging from film, TV, theatre and music production to amusement parks. This means traders can choose a business to their liking or alternatively, opt for a corporation with a ready-made business-pack.
For example, Walt Disney stock enables traders to tap into the following businesses: the Walt Disney studio, parks & resorts, a wide number of media networks, consumer products merchandising, and interactive media businesses.
Sync with industry dynamics
Ever-growing competition, technological advances and shifting markets push the media industry from pillar to post. We’re talking YouTube, Netflix, user-created content, social networking – all of which deviate control over content production from the established industry players.
Besides production, showbiz loses its grip on product ownership, too and continues to drift on a tide of piracy and plagiarism.
Hail to content
The most popular movie company stocks include:
- 21st Century Fox (FOX)
- Cinemark Holdings (CNK)
- Netflix (NFLX)
- Walt Disney stock (DIS)
To single out the best company for you, explore its content and whether it has got enough potential for a sequel or franchise. Harry Potter, Jack the Sparrow, Spiderman all started with a single movie but grew into globally recognised brands.
Judge the metrics
When you happen to stumble upon the movie investment opportunity of a lifetime, be sure to check the media company’s performance. The key metrics are as follow:
- box office and DVD sales
- TV ratings
- debt-to-equity ratio
- free cash flow.
The first two represent industry-specific indicators linked to the company’s ability to expand audience and generate sales from them. The latter are valid for all companies in general and demonstrate their financial health and profitability.
The benefits of investing into the media industry include portfolio diversification, risk management and an ability to tap into a myriad of businesses. Showbiz enables traders to delve into cutting-edge technology and quality entertainment.
The downside of fairy tale trading remains the very nature of investment – high risks. In reality, we don't all live happily ever after.