The economy is rapidly changing. But one consistency for investors is to consider companies with strong cash flow. Any firm that can keep money coming in during good times and bad is one worth considering for the long haul.
It’s even better for investors when a company finds new venues for generating cash during poor times. The pandemic created a number of opportunities for companies, with some still continuing to grow in the post-pandemic era.
Case in point?
The Walt Disney Company (DIS). The company reported strong subscriber numbers for its streaming service, a sign that its content and competitive pricing continues to build a large drove of customers.
And the company saw strong cash flows coming out of its theme park division, which had to shut down in 2020 but largely reopened months later.
Even with its strong earnings, shares are down 25 percent over the past year.
Action to take: As a leading entertainment brand, the strong cash flows from theme parks and streaming, among other divisions, is likely to continue to grow.
With the company still coming off some poor comps compared to prior years, shares look attractive for long-term investors here. The company has yet to restore the dividend it cut in 2020.
For traders, the June $175 calls, last going for about $3.50, offer a high double-digit return should shares continue with their recent move higher in the coming months. Traders could even see triple-digit gains before the options expire.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
