The last few years have been a tricky time to be an investor, with the market going through peaks and valleys alongside a global pandemic and severe macroeconomic headwinds. However, easing inflation has allowed many stocks to gradually trend up since the start of the year. That makes now a great time to consider adding new companies to your portfolio.
While last year was a challenge for many consumer-reliant companies, recent improvements in the cost of living could lead to a bull run in the coming months.
Here's why Amazon (AMZN -1.11%), Disney (DIS -0.83%), and Comcast (CMCSA -0.33%) are no-brainer buys right now.
1. Amazon
In 2022, Amazon shares plunged nearly 50% after repeated hits to its e-commerce business. Reduced consumer demand and foreign currency fluctuations led its North American and international segments to report combined operating losses of $10.6 billion in Amazon's fiscal year. The company managed to stay profitable thanks to its cloud platform, Amazon Web Services, hitting $22.8 billion in operating income.
However, that wasn't enough to keep investors bullish. As a result, the company's stock is trading at a bargain. Amazon shares are down 20% year over year despite a slight recovery since Jan. 1. Meanwhile, the company is home to a highly profitable cloud business and a dominant e-commerce website that will undoubtedly bounce back once economic challenges subside.
Wall Street seems to agree, as Amazon's average 12-month price target of $137 accounts for a 26% rise in its stock. With a positive long-term outlook, Amazon stock is a must-buy right now.
2. Disney
On Feb. 8, Disney CEO Bob Iger laid out a plan to cut costs by $5.5 billion, with the majority of savings coming from reductions in content spending. Then, this April, Bloomberg reported the company would soon lay off thousands of workers, including about 15% of its entertainment division. The budget slashes are positive news after Disney's media and entertainment division experienced a sharp decline in earnings in fiscal 2022, with operating income falling 42%.
An economically challenging year made expanding in the streaming industry costly, which ate into the company's profits. However, easing inflation and moves to cut costs have seemingly put Disney back on a growth path.
As a result, the company's forward price/earnings-to-growth (PEG) ratio of 0.17 makes its stock immensely attractive. The figure suggests Disney shares are currently undervalued, which aligns with the company's average 12-month price target of $129 -- projecting a stock rise of roughly 30%. And with that, Disney stock is currently a no-brainer buy that could offer substantial gains over the long term.
3. Comcast
Comcast, the home of NBCUniversal, is an increasingly compelling investment after the release of The Super Mario Bros. Movie in early April. The film earned $872 million worldwide in its first three weeks, becoming the highest-grossing movie in 2023 and achieving the biggest opening for an animated title ever.
The massive success opens many doors for Comcast in terms of subsequent film releases and at its Universal Studios theme parks. In March 2021, the company unveiled a Super Nintendo World area at Universal Studios Japan and it opened a similar addition to its Los Angeles park this past February. The warm reception to the video game-themed park has led Comcast to build a Super Nintendo World at its Florida park, due to debut in 2025. The company will likely profit from an increase in park attendance in the coming months, thanks to renewed hype for its Nintendo World and the summer season.
Comcast is best known for its cable and broadband offerings. However, as the linear market declines, the company is gradually transitioning its business to focus more on broadband/wireless services and content production. It will take time, but the company has compelling brands, such as Jurassic Park, Back to the Future, Fast & Furious, and the animation studio Illumination, which could go a long way in attracting consumers.
With a forward PEG ratio of 0.05 and the stock down 10% year over year, Comcast shares are trading at a bargain, with now an excellent time to invest.
