Disney Under $100 Is Very AppealingDIS) as I have often recommended investors to capitalize on its recent pullback. Although Disney has not moved much higher since my buy recommendation, the stock sure has stabilized and the company has also reported a great quarter. Although Disney has inched 10% higher than its 52-week lows, I expect the company to build on the recent quarter and continue moving higher.
In the latest reported quarter, Disney surpassed estimates on the earnings as well as revenue front. The company reported earnings per share of $1.62, $0.01 better than the estimates.
Revenue generated from cable networks surged 1.4 percent, whereas broadcasting revenue escalated 4.8 percent. Operating income increased 0.6 percent to $2.09 billion, while the company saw 6 percent downfall in the case of broadcasting. According to the company, the primary reason behind the trivial surge in operating income was the growth at ESPN, partially balanced by various factors. The surge at ESPN was grounded on growth in associate and advertising revenue, partially balanced by higher programming costs.
Furthermore, the company’s standout performer was its most significant studio business, which recorded a 40 percent sales surge and 62 percent greater profits as it endures its epic winning streak at cinemas.
All the latest super hit movies delivered by the company aided it to offset weakness in its core media business, which accomplished zero profit growth as advertising revenue dropped in the broadcasting segment. All in all, the quarter was very good considering Disney’s recent weakness.
Image by hhyunma / Pixabay
Apart from the results, the company also detailed that its asset mix is robust, as well as its ability to perform in ways that improve its brand and build value for shareholders. At present, Disney relies on hope for its long-term potential, considering that 300 million people live within a four-hour drive of the park in Shanghai.
As a matter of fact, the more Disney is aware of what its visitors are doing, the more it can accomplish their experience in real world. Therefore, the company is considering a new way to magnify its capabilities to track guests so as to create a personalized experience at an amusement park.
Due to Disney’s diversified revenue stream, I think the stock is a bargain under $100. Patient investors should consider adding Disney to their portfolios while it is still trading under at $100.
Published on Aug 12, 2016By Prudent Investor