🤖📈 Top Trade Ideas for August 1

Disney's stock performance has been poor, but there is potential for recovery as CEO Robert Iger makes tough choices to return the company to its former glory. Disney has faced challenges with its streaming segment and declining cable revenue. However, the theme parks, cruises, and consumer products business have been a bright spot, benefiting from pent-up demand. Disney is cutting costs, canceling shows, and focusing on profitable areas. The dividend, paused in 2020, could return by the end of the year. Disney aims to focus on profitability in its streaming business and expects to have a significant number of Disney+ subscribers by the end of fiscal 2024. The company plans to raise prices for Disney+ and reduce non-content-related expenses. Cost-cutting and a narrowing of streaming losses are expected to improve Disney's bottom line. The stock price is seen as undervalued and has potential for a 25% increase. The author suggests that Disney's streaming business alone could be valued at $74 billion, and the theme parks and consumer products segment at $134 billion. The author argues that the risk/reward favors buying Disney stock at its current price. There is also mention of the potential for Apple to buy Disney, and the reinstatement of the dividend would demonstrate financial stability and support the stock price.

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The author provides a bullish outlook on Carlisle, highlighting its robust roofing business characterized by its defensiveness, market leadership, and strong growth prospects. The author posits that re-roofing demand, along with trends toward energy efficiency, underpin the future growth of this sector. The market is seen as undervaluing Carlisle due to lack of coverage and cyclical concerns, despite the company's resilient sales and sustained profitability even through Covid-19. The author applauds Carlisle's prudent capital allocation and anticipates significant EPS growth to $29 by 2027, with a price target of $462. Projected IRRs range from 11% to 27% depending on various scenarios. Macro risks are acknowledged, with margins being the main long-term concern. However, even with anticipated margin compression, the author's model still shows positive IRR. The author calls for divestment of non-core assets to bolster value and believes market cyclical worries, conglomerate discount, and under-appreciation of growth drivers offer a unique investment opportunity. The author emphasizes Carlisle's sustainable and green initiatives as future growth drivers, and sees the company as undervalued with high risk/reward potential.

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The author maintains a bullish stance on Ultralife Corporation, citing its strong revenue growth (net sales increased by more than 4x in the quarter ended June 30, 2023 compared to the same quarter in 2022), particularly in the Communications Systems segment, and a robust balance sheet as primary factors. The revenue increase is attributed to growing demand from government/defense and medical sectors, improved gross margins, and disciplined spending. The author also applauds Ultralife's diversification efforts and expects further net sales growth due to strengthened customer relationships and market expansion. Despite concerns over rapid raw material cost inflation, dependence on L3Harris Technologies as a key customer, potential U.S. government budget cuts, cybersecurity risks, and intense competition, the author is optimistic about Ultralife's future performance, projecting a net sales growth of approximately 6% from 2023 to 2034. Based on a DCF model, the author suggests a fair stock price of around $15, highlighting the company's undervaluation and potential for upside.

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