Booking Holdings versus Disney: Why only one is a buy

Consumers are increasingly becoming choosier about where they are spending their dollars. One arena that could see an impact is leisure spending. In the latest edition of Good Buy or Goodbye, Main Street Research Chief Investment Officer James Demmert says Booking Holdings is a stock worth adding to your portfolio, while Walt Disney may be one you want to skip.

Demmert likes Booking Holdings (BKNG) because of its growth and "consistent" high profit margins. Demmert argues the company has built a "moat" around its business model, building up a "hard-to-penetrate market share." He also notes it has a good valuation. What would make Demmert have concerns about the stock? A recession or pandemic.

On the flip side, Demmert is not a fan of Disney (DIS). One of his big concerns is management, specifically that current CEO Bob Iger may be unable to fix the damage done by former CEO Bob Chapek. Demmert is also concerned about the amount of money being spent on content and thinks the stock is overvalued. He says a couple of things could turn Disney into a buy — a change in strategy or the company becoming a takeover target.

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