We recently compiled a list of the 7 Best Stocks for Beginners with Little Money According to Analysts. In this article, we are going to take a look at where The Walt Disney Company (NYSE:DIS) stands against the other beginner stocks.
On one hand, some investors view the status quo as a bear market, and on the other, some analysts hold a bullish view. While caution is necessary, blue chip stocks with historically solid results have an edge in the risk department.
The Status Quo Calls for Safer Investing
Geopolitical tensions on the one hand and economic turmoil on the other, have created a concerning situation for investors. On September 3, Tom Lee, Fundstrat Global Advisors managing partner and head of research, appeared in an interview on CNBC to share his outlook of the market. Lee is particularly concerned about the job market, the surprise inflation has in store for the economy, and weak growth projections.
Lee emphasized that investors must remain cautious for the next eight weeks or so, especially with elections and rate cuts, he predicts that the general public is bound to be nervous and confused. While his timeline may not be exact, he expects economic conditions and political turmoil to settle within the suggested time frame.
He further added that it is safer to be cautious than to make hasty decisions at the moment. He also stated that the oil industry is particularly weak due to geopolitical tensions despite a massive rise in production. Lee added that increasing production levels does not indicate a booming global economy, because, previously, production increased only because prices were rising which led to more drilling and activity in the sector.
Lee recommended that investors will be able to buy long, and therefore it is best to remain cautious. He further added that we already had 7% corrections twice this year, and there is a possibility of another 7% to 10% correction in the market. He did agree that the market is currently testing investors’ patience and he predicts something close to a 5% pullback.
How Must Investors Navigate Moving Forward?
On September 6, Liz Ann Sonders, Charles Schwab’s chief investment strategist, appeared in an interview on CNBC to discuss how investors should navigate the market right now. Sonders held a particularly bullish view of the market. She further added that while there has been significant weakness and churn on the surface, it is concealed by cap-weighted index returns.
Sonders suggested that the market level declines were most likely a set-up for the broadening out we have witnessed. She shared her point of view on the market, which is rather bullish, and emphasized that stocks in the consumer discretionary, technology, and communication services sectors are doing particularly well. Sonders, however, did point out that the market may see an exhaustion in the mega-cap tech trade.
She then suggests that investors must let go of the perception that to succeed they must invest in mega-cap tech stocks. She states that there are a myriad of opportunities outside of the mega-cap tech that are high quality. Finally, Sonders believes that a recession is not on the cards and that the current situation is nothing more than a growth scare.
Now that we have assessed the market, let’s take a look at the 7 best stocks for beginners with little money according to analysts. You can also take a look at the best defensive stocks to buy.
Our Methodology
To come up with the 7 best stocks for beginners with little money according to analysts we sifted over multiple similar rankings and ETFs to come up with safe and blue chip stocks. The rationale behind this was that investors with little money don’t afford to lose a lot and are more likely to invest in stocks that are safer or risk-free. We then sorted our stocks based on their upside potential. We have also included the hedge fund sentiment around each stock, as of Q2 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A packed theater of moviegoers watching a blockbuster film produced by the entertainment company.
The Walt Disney Company (NYSE:DIS)
Analyst Upside as of September 10: 30%
Number of Hedge Fund Folders: 92
The Walt Disney Company (NYSE:DIS) is a multinational mass media company that ranks second on our list of the best stocks for beginners with no money according to analysts. The diversified business operates across five major segments including media networks, parks and resorts, studio entertainment, consumer products, and interactive media.
In the fiscal third quarter of 2024, the company reported revenue worth $24.5 billion, up by 7% year-over-year. Its revenue was partially driven by its world-famous parks, which are highly attractive to tourists from across the globe. Its domestic parks and cruise chips segment accounted for 60% of operating income.
Walt Disney’s (NYSE:DIS) influence and position in the market is not unknown. Previously, in late July, the National Basketball Association (NBA) signed an 11-year media agreement with the company. All of the NBA’s and WNBA’s live events and programming will be streamed on ESPN’s consumer platform set to launch in 2025. The company also received 183 Emmy nominations for its top-class shows like Shotgun and The Bear.
Overall, The Walt Disney Company’s (NYSE:DIS) is a company like no other. Its services are unique and its target market is large, making it one of the best stocks to buy with little money. Analysts are bullish on DIS and their 12-month median price target of $115 points to a 30% upside from current levels. 92 hedge funds held positions in the stock at the end of Q2 2024. As of June 30, Fisher Asset Management was the largest shareholder with a position worth $787.9 million.
Mar Vista Investment Partners’ Mar Vista Focus strategy stated the following regarding The Walt Disney Company (NYSE:DIS) in its Q2 2024 investor letter:
“The Walt Disney Company’s (NYSE:DIS) shares declined after its earnings release, even though the company exceeded recently upgraded financial forecasts. While Disney+ and Hulu reached a milestone by turning their first quarterly profit, the company cautioned about theme park attendance returning to pre-pandemic norms. This signals a deceleration following a period of exceptional growth, impacting the stock as theme parks and experiences account for roughly 60% of Disney’s earnings. Despite broader consumer worries, Disney’s stock is still trading with a significant discount to fair value. We expect the gap between Disney’s market price and its intrinsic value to shrink as its streaming division evolves and increases profitability over time.”
Overall DIS ranks 2nd on our list of the best beginner stocks to buy according to analysts. While we acknowledge the potential of DIS as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DIS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
