Disney Looks Very Tempting at These LevelsDIS) several times in the recent past. The stock had pulled back considerably from its 52-week highs, which was a great opportunity for long-term investors to add the company to their portfolio as a discounted price. Although the stock has remained flat since, I expect it to break out soon due to several reasons.
Disney reported an amazing third quarter as the company shared earnings per share of $1.62, $0.01 better than the analysts’ estimates. The company’s revenue came in at $14.28 billion, beating the estimates by $130 million.
The third quarter’s results clearly show that the company’s asset mix, specifically its brands and franchises, is robust, as is its capability to execute in brand-improving and value techniques. On the other hand, the company shared that it is continuously focusing on challenges and opportunities as the media world endures to progress and change.
On the other hand, the company’s flagship movie brand, Disney, and its three brands shrewdly attained via acquisitions (Pixar, Marvel, and Lucasfilms) are helping it to grow at a rapid pace.
The company gained huge profits from the launch of blockbuster “Star Wars: The Force Awakens.” The film gathered around $2.1 billion at the box-office, placing it at the third position in terms of highest grossing movie around the globe.
Image by MichaelGaida / Pixabay
The only concern for Disney is its gradually decreasing ESPN subscriber count, which presently stands at 90 million, a drop of 10 million compared to the peak of more than 100 million in 2011. This might look like a big concern, but stockholders should also remember that there is a lot more to Disney than just ESPN.
As a matter of fact, Disney’s park segment revenue carries on growing at a strong rate, and with Shanghai Disney off to a great start, this segment looks quite promising. Moving onward, the company should be able to carry on generating great content, as it will keep its growth engine buzzing.
Apart from these, the company recently partnered with AT&T (T). Due to the deal, the company will now be able to telecast ESPN and several other channels included in the various limited content over the leading streaming services that are rolling out.
A key to successful long-term investing is buying great companies on pullbacks and I believe this is the perfect opportunity for long-term investors to accumulate Disney.
Published on Sep 6, 2016By Prudent Investor