April: It’s the month of our favorite holiday at The Motley Fool — April Fools’ Day. It typically comes with showers (“April showers bring May flowers”). It contains the deadline for Americans to file their tax returns. And April is the perfect month to buy promising stocks.
We asked five Motley Fool contributors which stock they especially like in April. They chose Walt Disney (NYSE:DIS), ExxonMobil (NYSE:XOM), LGI Homes (NASDAQ:LGIH), The Trade Desk(NASDAQ:TTD), and Twilio (NYSE:TWLO). Here’s what makes these five stocks top picks to buy in April.
An empire in the making
Jeremy Bowman (Walt Disney): With the acquisition of Fox’s entertainment assets finally behind it, the world’s biggest entertainment company now has nearly all the pieces in place to dominate entertainment for another generation.
Cord-cutting has proven a temporary thorn in Disney’s foot, eating away at profits from its media networks like ESPN and ABC. But by the end of this year, the company will have three streaming services: ESPN+, Disney+, and Hulu. (With the closing of the Fox deal, Disney now owns 60% of Hulu.)
In the Fox deal, Disney gets cable channels like FX and National Geographic and their content, and Fox Studios, including the critically acclaimed Fox Searchlight. It also gains a slew of Marvel characters who will fit well in the Disney ecosystem, including the X-Men and Fantastic Fourfranchises, as well as Deadpool.
What makes the Disney business model so powerful is the way it’s able to extract value from its slate of popular characters and other intellectual property through movies, TV shows, theme-park rides, and toys, all of which complement each other and reinforce the brand in a virtuous cycle.
Though its cable and broadcasting businesses have struggled, Disney’s theme parks and studio segments continue to put up strong growth, and its box-office releases this year look particularly strong. That signals that investors may be overlooking the potential in Disney stock. Shares have gone essentially nowhere over the past four years, but the company is in a much better position now than it was in 2015, and the stock is cheap at a price-to-earnings ratio of just 16.
A couple of announcements about new projects capitalizing on the Fox acquisition could remind investors that Disney is once again a growth company with explosive potential.
Expect some extra cash from this energy giant
Dan Caplinger (ExxonMobil): Buying stocks when they’re down and out is a well-established way to find long-term success, and oil giant ExxonMobil has gone through a lot of tough times lately. With the persistent challenge of low crude-oil prices and the difficulty of finding enough new reserves to replace its production, ExxonMobil’s shares have recently seen their price-to-tangible-book-value ratio drop to its lowest level in 30 years. That cheapness reflects investor skepticism that the oil giant can keep up with smaller, nimbler peers in the energy space.
Yet ExxonMobil is fighting back. The company has…
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