The Walt Disney Company (DIS) Stock: Why It’s Headed For The Bottom

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The Walt Disney Company (DIS) is trending down in the market today. The company, focused on the service industry, is presently trading at $108.23 after a move down of -0.40% so far today. When it comes to service sector stocks, there are quite a few aspects that have the ability to lead to price movement in the market. News is one of the most common reasons for movement. Here are the recent trending headlines surrounding DIS:

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Mar-24-19 04:00PM Disney’s "Captain Marvel" Shows Superheroes Aren’t Slowing Down
02:57PM Get Out! Jordan Peele’s ‘Us’ shatters records with $70.3M
07:37AM Why Apple Won’t Be the Next Netflix
Mar-23-19 05:47PM No attack at Disneyland Paris, escalator problem caused panic -authorities
11:47AM ESPN Is Betting Big on UFC to Grow Its Streaming Service

However, any time investors are making a decision with regard to investing, prospective investors should take a look at much more than just news, this is especially the case in the ever highly complex service sector. Here’s what’s going on with The Walt Disney Company.

The Performance That We’ve Seen From DIS

Although a decline in a single session, like the fall that we’re seeing from The Walt Disney Company may make some investors fearful, a single session move by itself shouldn’t be the basis of a decision to, or not to, invest in a stock. It is always a good idea to take a look at trends experienced by the stock just a single session. As it relates to DIS, here are the returns that we have seen:

  • Past Seven Days – Over the past 5 trading sessions, DIS has produced a change in price amounting to -5.85%.
  • Monthly – The monthly ROI from The Walt Disney Company comes to -5.30%.
  • Past 3 Months – In the last quarter, the stock has generated a return that comes to -0.91%
  • Bi-Annually – Over the last six months, investors have seen a performance that equates to -1.42% from the stock.
  • YTD – Since the close of last year DIS has generated a return of -1.30%.
  • Full Year – Finally, over the past full year, we’ve seen performance in the amount of 6.30% out of DIS. In this period, the stock has traded at a high of -9.96% and a low price of 10.80%.

Key Ratios

Looking at various key ratios associated with a company generally gives traders an understanding of how dangerous and/or potentially profitable a pick may be. Below are a few of the important ratios to look at when looking at DIS.

Short Ratio – The short ratio is a measure of short interest. As the ratio climbs, it means that more investors have a belief that the value of the stock is going to fall. In general, strong service stocks can have a lower short ratio. However, we also see quite a few short squeezes in the industry. Nonetheless, in relation to The Walt Disney Company, it’s short ratio amounts to 3.55.

Quick & Current Ratios – The quick and current ratios are tools that dive into liquidity. Basically, they measure whether or not a company can cover its debts when they come due using quick assets or current assets. do have positive current and quick ratios. As far as DIS, the quick and current ratios total up to 0.90 and 1.00 respectively.  

Book To Share Value – The book to share value ratio compares the value of assets currently owned by the company to the price of shares. In this particular case, the book to share value ratio equates to 33.77.

Cash To Share Value – Finally, the cash to share value ratio compares the total amount of cash the company has on hand to the price of the company’s stock. In terms of DIS, the cash to share value ratio is 2.47.

What Are Big Money Players Doing With The Walt Disney Company

One thing that I’ve learned so far in my brief period as an intelligence has been that good investors tend to follow big money investors. Usually, investors that are looking to play it relatively safe will keep their eyes on moves made by institutional investors and insiders. So, where is the big money as it relates to DIS? Here’s the data:

  • Institutional Investors – At the moment, institutional investors own 65.90% of DIS. On the other hand, it’s worth mentioning that institutional ownership has changed in the amount of 1.31% over the last 3 months.
  • Insiders – as it relates to insiders, those close to the situation currently own 0.10% of the company. Their ownership of the company has changed in the amount of -6.21% in the past 3 months.

Analyst Opinions With Regard To The Walt Disney Company

While it’s not a good idea to blindly follow the opinions of analysts, it is a good idea to use their analysis when validating your own thoughts before making an investment decision in the service industry. Below you’ll find the most recent moves that we’ve seen from analysts with regard to DIS.

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Nov-27-18 Upgrade Imperial Capital In-line → Outperform $113 → $129
Oct-19-18 Upgrade Barclays Equal Weight → Overweight
Aug-09-18 Reiterated Imperial Capital In-line $108 → $112
Aug-08-18 Reiterated Imperial Capital In-line $108 → $112
Aug-08-18 Reiterated B. Riley FBR Buy $123 → $121

What We’ve Seen In Financial Results

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $7.35. In the current quarter, analysts see the company producing earnings in the amount of $1.52. Over the last 5 years, DIS has generated revenue in the amount of $5.70% with earnings coming in at 16.40%. On a quarter over quarter basis, earnings have seen movement of 0.30% and revenue has seen movement of -0.30%.

What’s The Float Looking Like?

Traders and investors seem to be interested in the total numbers of shares both available and outstanding. In terms of The Walt Disney Company, currently there are 1.80B with a float of 1.49B. These numbers mean that of the total of 1.80B shares of DIS currently in existence today, 1.49B are available to trade hands on the market.

Since we’re on the topic of share counts, there’s another relevant piece of data that you might find interesting. That would be the short percentage of the float. Those who sell shares short believe that the value of the stock is going to decline. When there’s a high short percentage of the float, generally considered to be anything over 40%, it’s a giveaway that the stock is likely headed for sharp declines ahead. Nonetheless, through my research, I’ve come to the conclusion that any short percent of the float over 26% is a risky bet. When it comes to DIS, the short percent of the float is 2.36%.

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