Disney stock at a 52-week low: buy the dip or sell the rip?

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Nov 30, 2021
  • Josh Brown makes a bullish case for Disney on CNBC's "Halftime Report".
  • Disney reported disappointing fourth-quarter results earlier this month.
  • Shares of the media and entertainment firm are now at a 52-week low.

Shares of Walt Disney Co (NYSE: DIS) are trading at a 52-week low on Tuesday. While it surely is enticing for investors to buy it this low, the looming concerns related to Omicron dictate its theme parks could take another hit in the coming months.

Josh Brown sees significant upside in Disney

But that doesn’t make the stock unattractive, says Ritholtz Wealth Management’s Josh Brown. On CNBC’s “Halftime Report”, he quoted the historical price action to make a case that Disney could overlook the new COVID variant of concern.

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Keep in mind that throughout delta, Disney was able to rally because of Disney Plus. The theme parks, we just said forget it, it’s a next year’s story. So, it’s a stock that can reverse substantially higher if, in fact, Omicron is not the worst thing ever.

The stock has tanked nearly 20% in less than a month on disappointing results for the fiscal fourth quarter. Disney Plus had 118.1 million subscribers at the end of Q4 – well under 125.3 million that experts had forecast.

Sell-offs create buying opportunities

Brown is against the idea that Omicron-related uncertainty should scare investors into pulling out of the market because sell-offs create buying opportunities.

South Africa has a 28% vaccination rate. It’s not a surprise that a new variant is coming from a country where two-thirds of the population isn’t vaccinated. If you were to sell stocks every time something scary, health-wise, was coming out of Africa, you’d never be in the market.

His outlook matches Dory Wiley, who picked three sectors earlier today that investors should buy on the recent dip.

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