One thing we’ve learned in our years picking stocks is that it’s not enough to find a company that’s undervalued: a catalyst for the market to recognize the stock’s true value must exist. Without a catalyst, a stock can stay undervalued for years.

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    2 replies to "Too Many Positive Catalysts to Count for This Media Giant"

    • Ron

      I enjoyed reading the 2/13/19 analysis re DIS, especially re DIS+. I believe you may have understated the potential prowess of AT&T. AT&T has an excellent treasure trove of movies, but so does DIS. Not sure which co is superior, let’s say both are excellent. If neither DIS nor AT&T share these “treasures” with NFLX, NFLX has a problem. To offset this potential “problem,” NFLX is developing their own content, which suggests why NFLX needs to raise prices, in order to pay for development costs. Therefore, as a “catalyst,” believe DIS is “moat-like,” due to existence of its highly capable and successful studio. The winning stock is the company that provides the best value for the dollar spent on service. I think DIS. In that belief, is it possible to measure if DIS is taking market share from NFLX?

    • Sam McBride

      Thanks for your comment. Measuring Disney’s impact on Netflix’s market share will depend a great deal on how much disclosure Disney provides. Netflix gives its subscriber numbers quarterly, so it will be easy to determine if their growth slows down. However, it’s unclear at the moment whether Disney will provide regular disclosure of the subscriber numbers for Diseny+ when it launches. Without those numbers, it will be hard to measure if any changes in Netflix’s subscriber numbers are due to Disney, other competitors, or just saturation in the streaming market.

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