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BAMTech Deal Signals Disney's Digital Transformation And Makes The Stock A Strong Buy

Summary

The $1B BAMTech deal offers Disney the potential to more than offset its cord-cutting problems.

The deal promises to be a catalyst to Disney's lackluster stock performance.

The market is underestimating this potential. Patient long-term investors should take advantage of this opportunity.

Shares of Walt Disney (NYSE:DIS) have had a very tough year so far. The stock is down almost 11% YTD and has lost the previous "magic" that saw the stock tripling in value between 2012 and 2016.

The stock has now been in consolidation mode for months, lacking any momentum upwards or downwards. Despite one box-office success following another (Star Wars, Captain America, etc.), record-breaking merchandise revenue, a new theme park opening in Shanghai, and the immense value and awareness of Mickey & Co., the stock is not sparking any positive interest among investors.

The biggest concerns are that ESPN subscriptions continue to decline, and that DIS is not capable of either exploring new revenue streams or adjusting existing ones. This "cord-cutting" paranoia is hanging over the stock like the sword of Damocles.

With this one-sided perspective, the market is currently completely ignoring the deal Bob Iger recently closed in his quest to make Disney more...


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