No doubt the past couple of sessions, and really all of 2022 for that matter, have been great and profitable theater for bears. But now, the price for admission into select, badly beaten-down companies — which are among the market’s best entertainment stocks — is right for buying.
Inflation and economic growth worries associated with a potential recession have investors’ attention this week following sour consumer sentiment and expectations data warning consumers might soon need some major cost cutting on entertainment options.
However, I’m not buying it; Rather, I’m buying what other investors are fearfully selling. So, with that in mind, let’s head out of the June gloom and doom and review the four best entertainment stocks to buy right now in preparation for a more bullishly enjoyable show on Wall Street in 2022’s second half and beyond.
Best Entertainment Stocks to Buy: Disney (DIS)
Walt Disney (NYSE:DIS) is the first of our best entertainment stocks to buy.
The firm is synonymous with leisure and fun-filled activities for individuals and families across the globe. And for good reason.
From storied theme parks to the Disney+ platform and its massive library of classics and future blockbusters, the company’s controlling interest in streaming and cable sports powerhouse ESPN or Disney’s four cruise ships and Disney merchandise, nobody is bigger.
Bears, of course, have been enjoying the show in this stock, though. Shares are down 39% in 2022 and have been cut by nearly 50% from last March’s all-time high to June’s gloomy relative low. But that’s helping make DIS stock a bargain.
Now, shares are changing hands near March 2020’s crushed sales multiple near 2.3. What’s more, CNN notes Wall Street’s sell-side community is forecasting a 12-month price range of $110 to $176, and a median target of $135 for DIS stock — indicating upside of 16% to 86%.
Lastly, with this best entertainment stock trading inside its Covid-19 bottoming candle as oversold shares strike a decade-long 62% retracement level and trendline support, you don’t have to have Jedi mind powers to see DIS stock striking back for shareholders with big-time profits.
MGM Resorts (MGM)
MGM Resorts (NYSE:MGM) is the next of our best entertainment stocks ripe for bullish investors to purchase.
Sometimes it just pays to bet on red in the stock market. The strategy steals from Warren Buffett’s playbook of buying when others are fearful. And right now, there is little doubt investors have been worried about MGM stock — with shares sporting back-to-back months of losses totaling more than 30%.
Looking past other investors’ worries, the casino, gaming and destination giant is priced at a significant discount to street expectations. Analysts forecast a stock-price range of $40 to $76 over the next year for MGM stock. If correct, current buyers can enjoy winnings of 37% to as much as 160%. How’s that for betting on red?
Furthermore, there is other good news, too. On Tuesday, mandatory quarantine times in a designated facility for international visitors to China and the country’s gaming/resort enclave Macau were cut in half to just one week.
To be sure, the revision still doesn’t make for a sizzling summertime vacation for many would-be patrons. But in conjunction with shares striking long-term channel and Bollinger support and a test of MGM stock’s 50% Covid-19 retracement, it is an odds-on favorite for a winning purchase among the best entertainment stocks.
Best Entertainment Stocks to Buy: Netflix (NFLX)
Netflix (NASDAQ:NFLX) is the third of our best entertainment stocks to buy.
At the moment, the streaming entertainment giant sits in last place among the S&P 500’s year-to-date (YTD) stock performances. And no doubt the 71% loss it took to get there has been no laughing matter for NFLX investors.
To walk the aisle and past Netflix’s bulls throwing popcorn in disgust, this out-of-favor best entertainment stock has had challenges in 2022 including a marquee-worthy net subscriber loss for the first time in more than a decade. And management expects more customers to take to the exits for its second quarter.
Investors’ have also been concerned that Netflix’s content may not have the staying power or sway it once had. This is as Disney, Paramount Global (NASDAQ:PARA) and others with vast timeless libraries of entertainment enter the streaming market and on top of the “stay-at-home” trend that appears to be fading away.
Still, shares of this best entertainment stock do sit at historically compelling prices, with shares fetching just of more than 17 times this year’s earnings and sales multiple near 2.85. And with a nomination-worthy best supportive long-term price chart for bulls clearly in place, the price of admission looks worthwhile for NFLX stock buyers.
Take-Two Interactive (TTWO)
Take-Two Interactive (NASDAQ:TTWO) is our final and fourth member of the best entertainment stocks to buy.
Take-Two boasts a $20 billion capitalization and is a force within the gaming market. Titles such as its Grand Theft Auto and the Red Dead series have proven to be massive hits during and prior to Covid. Thus, there is little doubt future games from the company will also be hits in the potential recession that investors think we’re heading into.
Right now, and with shares having crashed this year, TTWO stock’s sales multiple is parked at Covid-19 levels. And it gets even better if we’re to look at the chart for TTWO stock.
The extended monthly view reveals shares have tested their March 2020 low. Moreover, after hitting new all-time highs in early 2021, Take-Two has formed a very bullish confirmed hammer reversal pattern on huge volume.
So, with the candlestick forming after a successful challenge of key Fibonacci support dating back to 2012 — and shares now offering an oversold bullish stochastics crossover for additional trade confirmation — it is game on for buying of TTWO stock.
On the date of publication, Chris Tyler did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.