For investors, early November has it all. Third-quarter earnings season is about to peak. The Federal Reserve is set to make its next interest rate decision, and we'll get the latest jobs numbers from the October employment report on Friday.
News events, whether they're earnings reports or macro-level updates, always have the potential to move stocks, making them a good time to tune in and see if you should buy or sell some stocks.
With that in mind, here are three stocks to put on your radar in November.
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1. Disney
Disney (DIS -0.04%) stock has attracted a lot of attention this year, but not always for the right reasons. Shares of the entertainment giant touched a nine-year low earlier this year on concerns about its declining legacy media business, its large debt burden resulting from the Fox deal, and challenges in its streaming business, including ongoing losses and a slowdown in subscriber growth, could weigh on profits for the foreseeable future.
The company also angered some cable subscribers in its dispute with Charter Communications in September.
However, there are signs that a turnaround could be imminent. Management has already said it expects to turn a profit in streaming by the end of fiscal 2024, which started in October, and the company has been shopping "non-core assets," including ABC and some of its cable channels, as well its Indian operations, which could fetch $10 billion.
An asset sale would help the company pay down debt, reassure investors that the company is focused on growth, and free up cash to invest in strategic priorities like buying the remaining third of Hulu from Comcast and taking the flagship ESPN cable channel to streaming.
Investors will be paying close attention when Disney reports fiscal fourth-quarter earnings on Nov. 8 to see if the streaming business is moving toward profitability and for any announcements about asset sales. Some good news could give the stock a jolt, as the business looks undervalued considering its potential.
2. Etsy
Online flea market Etsy (ETSY 0.34%) was a big winner during the pandemic, but the stock has been a dud since then, plagued by flat growth and more than $1 billion in write-downs from its shortsighted acquisitions of Depop and Elo7. The company has since sold Elo7 for much less than it paid for it.
However, there are signs that momentum is starting to build again for Etsy. After several quarters of declines in its base of active sellers and buyers, the key drivers of its business, both categories grew in the second quarter. In fact, Etsy reported 7% sequential growth in active sellers to 6.3 million on the Etsy marketplace showing high inflation and a weak economy in parts of the world could be helping convince some budding entrepreneurs to offer their wares on Etsy.
There are also some early signs that e-commerce improved in the fourth quarter with Amazon reporting 11% growth in its North America segment and 16% growth from its international segment, the bulk of which represent e-commerce. Additionally, Meta Platforms reported strong growth in online commerce, another sign that online retail is returning to growth.
Etsy is still highly profitable on an adjusted earnings before interest depreciation and amortization (EBITDA) basis, so the lack of revenue growth seems to be the main reason the stock is off nearly 80% from its pandemic-era peak. If Etsy can show improving revenue growth in its Nov. 1 earnings report, the stock could surge.
3. Roku
Finally, Roku (ROKU -10.29%) is yet another pandemic winner whose shares have since plunged. The company saw its growth go flat as the digital ad market hit a wall and it ramped up spending just as revenue growth was slowing.
The company has worked hard to correct that mistake, issuing multiple rounds of layoffs this year as it focuses on returning to positive adjusted EBITDA by next year. The good news for investors is that the company continues to see strong growth in viewership both in adding new accounts and in hours watched, which bodes well for long-term demand for its streaming distribution platform. Additionally, the proliferation of ad-based streaming tiers on the most popular services also fits well with its business model, as Roku typically takes 30% of available ad inventory from streaming partners using its platform.
It will take more than a quarter for Roku to execute its turnaround but there are signs it's on the right path, and the early reports that digital ad titans like Alphabet and Meta Platforms show that the digital ad market appears to be strengthening after last year's decline. Roku stock has a lot of upside potential if it can deliver accelerating revenue growth and take steps toward an adjusted EBITDA profit. We'll learn more when the company reports earnings on Nov. 1.
