Some of the brands you know and possibly love are on sale right now. If you've been looking to buy a piece of Walt Disney (NYSE: DIS), Roku (NASDAQ: ROKU), or Costco Wholesale (NASDAQ: COST) there may be no better time than the present.
The market's pretty volatile right now, but that same fear of pulling the trigger is also the opportunity. Let's take a closer look at Disney, Roku, and Costco. They look like no-brainer buys to me.
Disney
It was two years ago this week -- a year into the Bob Chapek's tenure as CEO -- that shares of Disney hit an all-time high just above $200. Disney's board was able to bring back the better-liked Bob Iger a few months ago, but the shares are trading in the double digits now. How does this make sense? Why is Disney less than half the company it was when Chapek was somehow alienating both fans and shareholders?
Iger has done nothing to diminish the excitement behind his return to the helm back in November. He's appeased shareholders by announcing huge cost savings and projected profitability for Disney+ by next year. He's doing right by theme park enthusiasts by undoing some unpopular moves. He will serve fans of Disney-owned content well by putting the emphasis of projects back on the creatives that make it popular.
Image source: Disney.
Look out to fiscal 2024, when Disney+ will stop being a drag on the media giant's bottom line. Disney stock is trading for a reasonable 17.5 times Wall Street's projected earnings for next year. Its theme parks are generating record operating results, and that's in a nervous global travel market. Disney's dividend is also coming back later this year, putting the House of Mouse back on the table for income-seeking funds and retail investors.
Roku
There's no forward earnings multiple in the teens when it comes to Roku. The leading player powering streaming sessions is deep in the red after its brief flirtation with profitability cascaded at the end of 2021. Losses widened sequentially as 2022 played out, and analysts see an even bigger deficit for 2023.
Roku still makes the cut here because its popularity is growing even as its stock is shrinking. The platform has never been as popular as it is right now. It began 2023 with 70 million active accounts, roughly 10 million more homes than it was serving a year earlier with nearly half of that growth coming in just it latest quarter.
Roku did prove mortal after years of sequential growth in average revenue per user in its last report. The temporary pullback in the global advertising market hasn't spared the connected TV market. Roku has also had its challenges on the hardware end, and costs keep heading higher as it expands its push for original content and new hardware categories.
It's still hard to bet against Roku just because everybody else is these days. The stock is down 88% since peaking two summers ago. It has a seemingly insurmountable market share lead in a growing industry. The bottom line is not pretty, but Roku has a cash-rich balance sheet that can hold the fort down in the near term for the top dog when it comes to streaming video stocks.
Costco
The stock chart isn't as cruel to Costco as it is for Disney and Roku. Shares of the warehouse club bellwether are just 22% below last year's all-time high. It's still a good time to warm up to the retailing staple that has delivered all-weather results over the years.
The chain of 848 warehouses has been a steady drum of positive comps and operating efficiency through thick and thin. The growth may not be flashy. Net revenue rose a mere 6.5% in last week's fiscal second quarter report, but earnings per share found a way to grow twice as fast.
Why should you buy Costco now? Pull up a Costco stock chart. Zoom out. Zoom out some more. Costco has hit a new all-time high every year for more than a decade. No streak lasts forever, but if it does continue it means that the shares will make back that 22% decline in the next 10 months. You have to like those chances, especially with Costco telegraphing that an increase to its annual membership fees is coming sooner rather than later.
Find out why Walt Disney is one of the 10 best stocks to buy now
Our award-winning analyst team has spent more than a decade beating the market. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed their ten top stock picks for investors to buy right now. Walt Disney is on the list -- but there are nine others you may be overlooking.
Click here to get access to the full list!
*Stock Advisor returns as of March 8, 2023
Rick Munarriz has positions in Costco Wholesale, Roku, and Walt Disney. The Motley Fool has positions in and recommends Costco Wholesale, Roku, and Walt Disney. The Motley Fool recommends the following options: long January 2024 $145 calls on Walt Disney and short January 2024 $155 calls on Walt Disney. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
