Here’s Why You Should Add Disney To Your Watchlist

They often say that Disney World is the most magical place on earth. Maybe. But trust me, that charm wears thin when you’ve been standing in lines for about eight hours at the end of a tiring day. And that’s a conservative estimate.

My family and I just got back from Mickey’s house last week. The shortest queue of the entire trip was 30 minutes… but that was only for ice cream.

The kids were out of school for winter break, and we thought February might be a bit less crowded than the peak summer months. Judging by the throngs of people, there is no “off-season” in Orlando. Approximate wait times for most of the bigger attractions were 120 minutes or more. Trying to ride more than four or five in a single day is almost physically impossible.

The one exception: Star Wars Rise of the Resistance at Hollywood Studios. It’s Disney’s most expensive, ambitious and immersive experience yet. But the line is virtual. As soon as the gates open promptly at 8 AM, visitors log in to their Disney apps and click a button to reserve a boarding pass for the ride.

Star Wars Galaxy’s Edge; Source: Wikipedia

Sounds simple enough. Except that every boarding pass for the entire day is gone within 30 to 60 seconds. Don’t blink. Arrive at the park at 8:01, and you’ll be greeted by a sign out front apologizing that there are no more available slots for the day. We got in line at 6 AM just to be sure. And fortunately, my teenage son has fast phone fingers. Once the system went live, we were lucky to snag boarding pass number 64 (yes, it was worth it).

There’s not much else Disney can do to improve guest experiences. They even give each park-goer three “FastPass” tickets per day, which are essentially shortcuts to the front of the line. Unfortunately, we arrived at the park to find that every single FastPass reservation time slot for every single ride was already booked from open to close… for the entire week.

Lesson learned: book your FastPass reservations at least a few weeks in advance.

In the end, it was still time well spent with family. And that’s why people look past the long lines. It’s also why Disney can raise prices year after year without making the slightest dent in the crowds. Even at $109 for a one-day pass, families eagerly file in faster than ever. That’s the textbook definition of an inelastic good.

The Power Of The Disney Brand

Some of you may be familiar with a concept my colleague Jimmy Butts talks about often – irreplaceable assets. The Disney brand certainly qualifies as just that.

Even on vacation I couldn’t help but marvel at Disney’s ability to monetize its brand. It’s not just the gate receipts, but food, lodging, souvenirs, and experiences.

Source: Wikipedia

The Disney World campus draws over 58 million visitors annually. The Magic Kingdom alone welcomes more than 57,000 paying customers on an average day. And to think when old Walt started buying up large tracts of rural Florida swampland in the 1960s, people thought he was crazy.

Of course, theme parks are just one cog in the Disney machine. Thanks to its acquisitions of Marvel and Pixar, the firm’s movie studio generated an unprecedented $13 billion in global box office sales last year. This same media empire also owns ABC and ESPN. And the new Disney+ video streaming service has already attracted 40 million subscribers after launching just a few months ago.

I’m Putting Disney On The Watchlist

Yet, even mighty Disney (which has a park in Shanghai) isn’t immune to the coronavirus fears. The stock has fallen to its lowest levels in nearly a year.

(Related: Should You Buy This Coronavirus Victim On The Dip?)

This, combined with the departure of longtime CEO Bog Iger, is creating a possible entry point for new investors. Personally, this is one ride I’d like to jump on. But like all the incredible attractions at Disney World, I don’t mind waiting. A further pullback below $110 would make DIS a very intriguing portfolio candidate.

In the meantime, I’m excited about the latest research report from my colleague Jimmy Butts and his team over at Top Stock Advisor.

Jimmy and his team have been closely following a little-known satellite company that just paid a measly $26 million for a tech startup. And this tiny company was sitting on an absolute gold mine… As it turns out, this startup owned exclusive global rights to a huge slice of satellite communication frequency channels. And this hidden asset could be worth up to $10 billion in the future.

To get a full briefing on this fascinating opportunity, go here now.