Disney stock currently trades at $85 per share, about 58% below its pre-inflation shock high of about $202 seen on March 8, 2021. The sell-off has been driven primarily by Disney’s streaming business, which faces multiple headwinds. While Disney has invested considerably into the business, it remains deeply lossmaking, with its subscriber count in recent quarters declining amid mounting competition and the loss of crucial cricket streaming rights in India. Disney posted mixed results over Q3 FY’23 results, with revenue rising by 4% year-over-year to $22.3 billion, although adjusted earnings per share declined 6% to $1.03 per share. While Disney stock was trading at a low of about $84 in December, it recovered to about $110 by June 2023 due to the return of Bob Iger as CEO, although it has declined once again to $85, partly due to a settlement with Charter Communications
CHTR
Interestingly, DIS stock had a Sharpe Ratio of 0 since early 2017, which is lower than the figure of 0.5 for the S&P 500 Index over the same period. Compare this with the Sharpe of 1.2 for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.
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