This record-breaking stock has the ‘perfect stay-at-home story,’ portfolio manager says
One Dow stock is rallying to records this week.
Disney shares have hit all-time highs for three days in a row, their latest lift on the back of the company's streaming success. Disney this week launched its international streaming service, Star, in Europe, Canada and Australia.
Total paid subscribers for its Disney+ streaming platform climbed to nearly 95 million in its recent quarter, countering sharply lower revenue from its pandemic-hit parks segment.
"The streaming business is the perfect stay-at-home story, and it's provided the company with some stability during the shutdown," Federated Hermes portfolio manager Steve Chiavarone told CNBC's "Trading Nation" on Wednesday.
Chiavarone said investors are also pricing in high expectations for a post-pandemic recovery.
"You're getting into this reopening phase where theme parks, cruises — these are all activities that we expect, over the next year or so — people are going to get back to. That diversified business model is paying off," said Chiavarone.
Netflix's subscriber base dwarfs that of Disney+, but New Street Advisors founder Delano Saporu points to the new content and strong growth to explain the high value of the stock.
"You saw them hit their four-year subscriber [projection] in 14 months," he said in the same interview. "They also have new content coming out, the new Star Wars series is coming in May, and also they have some Marvel series coming in June. So investors are looking for that original content. That's something that they're valuing."
The combination of a strong streaming offer and future reopening is the recipe for success, Chiavarone said.
"It's a perfect example of a company that's using the pandemic to invest in technology and coming out more productive and stronger going forward," he said.
Disclosure: New Street Advisors holds DIS.