Dump Disney.

Walt Disney Co. (DIS) has achieved the expected box-office successes in recent months with its Star Wars franchise and the movie Black Panther, but the stock hasn't advanced in response and I see no near-term catalyst for the name.

On the contrary, I think that Disney's next earnings report will continue to highlight the secular headwinds that the company faces. In fact, I concluded nearly three years ago that DIS was a good name to short when I added it to my "Best Short Ideas" list in November 2015 at $116.25. Some 2-1/2 years later, Disney closed Tuesday at $99.46 and I'm making a short of the stock this week's Trade of the Week.

I based my 2015 conclusion on my belief that Disney's earnings per share will only grow 7% to 10% per year going forward. That's far below not only the company's historic 18% EPS growth rate, but also under analysts' consensus forecasts for 12% to 13% annual gains.

In fact, Disney looks like a "value trap" to me. As I've previously written, investors might look more critically at Disney's future progress than they did at past successes, meaning that historic valuation metrics might not apply. So, what appears to be an inexpensive stock based on historical relationships might not really be all that cheap.

The bottom line to me is that The Mouse Might No Longer Be Roaring.

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