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For nearly all of 2022, the bears have been reigning. But now, the price of admission for select beaten-down companies is right for buying. Among these beaten-down companies are several of the best entertainment stocks out there.
Inflation and macroeconomic worries associated with a potential recession have investors’ attention. This follows sour consumer sentiment and data warning that consumers might soon need to do some major cost-cutting. Should that happen, entertainment options are often some of the first to go.
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 gloom and doom and review the four best entertainment stocks to buy right now.
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, nobody is bigger. Not to mention the company’s controlling interest in sports powerhouse ESPN, its four cruise ships and Disney merchandise.
Bears, of course, have been enjoying the show in this stock, though. Shares are down 29% in 2022 and nearly 45% from March 2021’s all-time high. But that’s helping make DIS stock a bargain.
Now, shares are changing hands at a crushed sales multiple near 2.5x. What’s more, CNN notes Wall Street’s sell-side community is forecasting a 12-month price range of $120 to $160, and a median target of $140 for DIS stock — indicating upside of 10% to 47%.
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 down more than 20% over the last six months.
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 $72 over the next year for MGM stock. If correct, current buyers can enjoy winnings of 23% to as much as 121%. How’s that for betting on red?
Best Entertainment Stocks to Buy: Netflix (NFLX)
Netflix (NASDAQ:NFLX) is the third of our best entertainment stocks to buy. At the time of writing, NFLX stock is suffering a 64% loss year-to-date (YTD). That’s no laughing matter for investors.
This out-of-favor 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.
Investors have also been concerned that Netflix’s content may not have the staying power or sway it once had. This comes as Disney, Paramount Global (NASDAQ:PARA) and others with vast timeless libraries of entertainment enter the streaming market.
Still, shares of this entertainment stock do sit at historically compelling prices, with shares fetching just 20 times this year’s earnings and a sales multiple near 3.3x. The price of admission looks worthwhile for NFLX stock buyers.
Take-Two Interactive (TTWO)
Take-Two Interactive (NASDAQ:TTWO) is our fourth and final member of the best entertainment stocks to buy list.
Take-Two boasts a $20 billion market capitalization and is a force within the gaming market. Titles such as “Grand Theft Auto” and the “Red Dead” series have proven to be massive hits during and prior to the Covid-19 pandemic. 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. Shares are down nearly 34% YTD.
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.