Author Topic: Disney Stock : Buy now?  (Read 4960 times)

supervirus

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Disney Stock : Buy now?
« on: October 16, 2016, 01:26:54 PM »
Hi ,

Do you think Disney stock (DIS) is a good buy currently. For holding it for a long time . Possibly 5-10 years or maybe forever.

My reasons:

1. Very powerful brand. I am 30 years old. I loved Mickey mouse when i was a kid . Kids growing up now also love mickey mouse and other disney characters. The brand is here to stay.

2.The brand is recognized globally . Their cable business is suffering currently . But they may recover out of it soon.

3. Pays Dividends .Although not much. It has scope to grow.

4. Stock is available at 16.5 times earning.

5. It is available at a discount of 25% of its recent high.


ClaycordJCA

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Re: Disney Stock : Buy now?
« Reply #1 on: October 16, 2016, 04:44:58 PM »
I much prefer the diversification of owning the entire market. I own Disney and thousands of other companies. If you want to own individual stocks that you think can beat the market, I suggest limiting holdings to 5% of your investments since passive index investing has proven to be the best way for small investors to be successful over long periods of time. And be able to explain why you think the particular stock(s) you own will out perform the index on a going forward basis.

ysette9

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Re: Disney Stock : Buy now?
« Reply #2 on: October 16, 2016, 04:50:05 PM »
You may find some people who will discuss invidivual stock picks with you on these boards, it for the most part everyone is going to give you the same boring response: VTSAX, VTIAX, or some combo of the both. Personally I favor 60% VTIAX and 40% VTIAX. Our IPS states our target is 10% bonds but in practice we are at something closer to 5%.

ender

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Re: Disney Stock : Buy now?
« Reply #3 on: October 16, 2016, 08:26:59 PM »
we need mrpercentage.

I hope he didn't get banned :'(  but he's been silent for a long time now. Gotta lay off the drunken posting...

Financial.Velociraptor

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Re: Disney Stock : Buy now?
« Reply #4 on: October 16, 2016, 10:12:36 PM »
we need mrpercentage.

I hope he didn't get banned :'(  but he's been silent for a long time now. Gotta lay off the drunken posting...


MOAR DRUNKEN POSTING!!!

JetBlast

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Re: Disney Stock : Buy now?
« Reply #5 on: October 17, 2016, 09:12:26 AM »
Hi ,

Do you think Disney stock (DIS) is a good buy currently. For holding it for a long time . Possibly 5-10 years or maybe forever.

My reasons:

1. Very powerful brand. I am 30 years old. I loved Mickey mouse when i was a kid . Kids growing up now also love mickey mouse and other disney characters. The brand is here to stay.

2.The brand is recognized globally . Their cable business is suffering currently . But they may recover out of it soon.

3. Pays Dividends .Although not much. It has scope to grow.

4. Stock is available at 16.5 times earning.

5. It is available at a discount of 25% of its recent high.

I agree that the Disney brand is truly staggering.  The classic characters like Mickey and Minnie, Pixar, Star Wars....it just goes on and on.  It drives huge profits in movies and television and merchandising, and drives traffic to their theme parks. Those parks are a big part of the brand themselves.  In one form or another, Disney will be around for decades, churning out profits from films, merchandise, theme parks, and anything else you can imagine that can have a character slapped onto it. 

The reason it's down at current prices is negativity over the cable television business, which was their most profitable area of business last quarter.  More and more people are cutting the cord and moving to cheaper streaming options. Disney has some crown jewels in the cable television business with the ESPN networks and their own Disney channels, but right now nobody seems to have a good idea as to how to value that part of the company. Believe it or not, a quick glance at the latest 10-Q shows cable revenues and profits were up 1% year over year last quarter, but I have no clue whether they can keep that performance up and it is obvious many in the market don't have confidence that they can.  Cable television represents nearly 30% of their revenues, at $4.2 billion last quarter, nearly as large as their theme parks and resorts business. Cable is also far more profitable at nearly 50% margins.

The dividend itself isn't a reason to buy a stock.  Sure, it imposes some discipline on management since they know they are expected to keep up those payments, but investors should be focused on total return, with the dividend one component of that return. The P/E of 16.5 sounds reasonable, but have you dug into the numbers to see if there are any unusual one-off profits or charges that are affecting that number? I haven't really looked at DIS in a couple years. I don't know whether the current price is a steal, fair, or overvalued, and wouldn't know until I did some serious reading.  I could then make different estimates on the future of the cable and OTA television business and see how those affect my valuation. 

I'm not trying to sway you one way or the other, just raising some points to consider.  If you're really in it for the long haul I think Disney has too many valuable assets for it to turn out badly for an investor, but like I said, I haven't really taken a good look at it in a couple years. 

HeadedWest2029

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Re: Disney Stock : Buy now?
« Reply #6 on: October 17, 2016, 09:28:46 AM »
Disney is one of the final remnants from my individual stock ownership days that has survived.  Of all the reasons you listed, brand / moat is the only compelling reason I'd say to invest.  Cord cutting is here to stay and just picking up momentum so it's down 25% for good reason (as opposed to some trivial nonsense market overreaction).  Disney is ruthlessly profitable, but they certainly aren't some nimble up and comer to justify a high p/e so 16.5 to me seems about right.  I'm a evangelical indexer now, so take that into consideration.  I'm sure you'd do fine with owning Disney for 10 years, but ask yourself how many super smart analysts already cover that company. What's the chances you know something everyone else is missing, and therefore the stock price is undervalued? 

addition: And even when it comes to brand, that's not assured in the future. See: Volkswagon, Wells Fargo, etc
« Last Edit: October 17, 2016, 10:52:33 AM by FourPercenter »

Jack

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Re: Disney Stock : Buy now?
« Reply #7 on: October 17, 2016, 09:41:59 AM »
Hi ,

Do you think DisneyKodak stock (DISK) is a good buy currently. For holding it for a long time . Possibly 5-10 years or maybe forever.

My reasons:

1. Very powerful brand. I am 30 years old. I loved Mickey mouse Kodacrome Photos when i was a kid . Kids growing up now also love mickey mouse photography and other disney charactersfamily treasures like film making. The brand is here to stay.

2.The brand is recognized globally . Their cablefilm business is suffering currently . But they may recover out of it soon. They invented digital photography, and you know, the world will soon be taking pictures with phones and that space will explode with profit.

3. Pays Dividends, steadily for decades .Although not much. It has scope to grow.

4. Stock is was available at less than 16.5 times earnings.

5. It iswas available at a discount of >25% off its recent high.

Fixed for you

I like that you picked that particular example, since it allows me to post this:

http://www.joshuakennon.com/eastman-kodak-example/

TL;DR:

Quote from: Joshua Kennon
Let me repeat the lesson: You cannot just look at stock charts to gauge the performance of your holdings.  Sometimes, you can walk away with more money even though your shares experience a 100% loss.  Wipeout losses are always bad you should do everything you can do avoid them but they are often not the entire story.

supervirus

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Re: Disney Stock : Buy now?
« Reply #8 on: October 18, 2016, 12:03:13 AM »
Thanks a lot guys , lots of valuable inputs!

chasesfish

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Re: Disney Stock : Buy now?
« Reply #9 on: October 18, 2016, 05:22:28 AM »
FWIW, I bought more yesterday when it went under 91.  Its about 3% of my portfolio and I'm a big fan at this price, I think the discounts that are priced in over cable are not nearly as bad as everyone thinks.  Their parks and intellectual properties are a machine.

You have to make sure owning some individual stocks is for you.  I'm 30% individual stocks and 70% funds


Jack

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Re: Disney Stock : Buy now?
« Reply #10 on: October 18, 2016, 07:28:27 AM »
I have no gripes with index investing (and I do a lot of that myself) but here is an alternative argument.  Assume you buy a random basket of 25 stocks instead of the index.  You do this by buying an individual stock every time you would have bought an index, so the entry transaction costs are the same.  Your basket of 25 stocks has a 50/50 chance of doing better or worse than the total market on a notional basis since it has been picked at random and the total market is just the aggregation of all the stocks in it.  The more stocks in your random portfolio the more likely you will closely follow the market on a national basis.  But then you add in the fees and the tax loss harvesting then at least theoretically the advantage has been tilted to your individual stock portfolio. 

I would argue that your random basket of 25 stocks is likely to be more volatile than an index fund that holds every stock, which tilts the advantage back.

MoonLiteNite

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Re: Disney Stock : Buy now?
« Reply #11 on: October 19, 2016, 03:38:02 AM »
I do not know how to read the books, but the TA for disney is still a little iffy, on the long term side of things.
If you do buy in now, for long term (3 months or more), i would put a stop loss in around 85. You would be risking a bit, and i never trust TA for long term trades.
I personally would not buy for long term until the price hits around 86, then use a 85 stop loss and look for the slow rebound, that would be more of a mid term swing though :D

Short term, a day to a few weeks, i would buy in if the price hits 91.40 and put a stop loss at 91.30. Looks like if it crosses the 91.40 it has a good chance to at least make it to 92.50. So small 10 cent risk for a 1.10 upside, not a bad RvR! I actually may do this myself....
« Last Edit: October 19, 2016, 03:45:13 AM by MoonLiteNite »

HeadedWest2029

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Re: Disney Stock : Buy now?
« Reply #12 on: October 19, 2016, 11:19:18 AM »
Follow MoonLiteNite's advice if you want to maximize transaction fees by employing shaman technical analysis. 

Scandium

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Re: Disney Stock : Buy now?
« Reply #13 on: October 19, 2016, 11:56:41 AM »
Follow MoonLiteNite's advice if you want to maximize transaction fees by employing shaman technical analysis.


frugledoc

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Re: Disney Stock : Buy now?
« Reply #14 on: October 19, 2016, 12:57:08 PM »
I do not know how to read the books, but the TA for disney is still a little iffy, on the long term side of things.
If you do buy in now, for long term (3 months or more), i would put a stop loss in around 85. You would be risking a bit, and i never trust TA for long term trades.
I personally would not buy for long term until the price hits around 86, then use a 85 stop loss and look for the slow rebound, that would be more of a mid term swing though :D

Short term, a day to a few weeks, i would buy in if the price hits 91.40 and put a stop loss at 91.30. Looks like if it crosses the 91.40 it has a good chance to at least make it to 92.50. So small 10 cent risk for a 1.10 upside, not a bad RvR! I actually may do this myself....

I can never tell if people are joking or being seriously when they talk TA.


talltexan

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Re: Disney Stock : Buy now?
« Reply #15 on: October 19, 2016, 02:08:00 PM »
Disney is a unique brand. You may have non-financial reasons to want to be an owner.

DragonSlayer

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Re: Disney Stock : Buy now?
« Reply #16 on: October 19, 2016, 06:12:21 PM »
Disney is a unique brand. You may have non-financial reasons to want to be an owner.

This. Disney is a psychological buy. Nostalgia, fun factor, etc. I bought a few shares at the bottom of the '08 crash "just because." I'm a huge Disney fan and used to work for the Disney Store. Back then, you could even order a stock certificate decorated w/Disney characters. (I think they've done away with it now.) And, if you need an excuse for a vacation, you can go to the shareholders meeting every year! (Just kidding, sort of. Some people do it.)

Disney isn't even a blip in my portfolio though. I prefer mutual and index funds for the "serious" money, but there are way worse ways to spend money on something you want for fun or because you're a fan of the things they produce.

bacchi

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Re: Disney Stock : Buy now?
« Reply #17 on: October 19, 2016, 06:45:11 PM »
Hi ,

Do you think DisneyKodak stock (DISK) is a good buy currently. For holding it for a long time . Possibly 5-10 years or maybe forever.

My reasons:

1. Very powerful brand. I am 30 years old. I loved Mickey mouse Kodacrome Photos when i was a kid . Kids growing up now also love mickey mouse photography and other disney charactersfamily treasures like film making. The brand is here to stay.

2.The brand is recognized globally . Their cablefilm business is suffering currently . But they may recover out of it soon. They invented digital photography, and you know, the world will soon be taking pictures with phones and that space will explode with profit.

3. Pays Dividends, steadily for decades .Although not much. It has scope to grow.

4. Stock is was available at less than 16.5 times earnings.

5. It iswas available at a discount of >25% off its recent high.

Fixed for you

I like that you picked that particular example, since it allows me to post this:

http://www.joshuakennon.com/eastman-kodak-example/

TL;DR:

Quote from: Joshua Kennon
Let me repeat the lesson: You cannot just look at stock charts to gauge the performance of your holdings.  Sometimes, you can walk away with more money even though your shares experience a 100% loss.  Wipeout losses are always bad you should do everything you can do avoid them but they are often not the entire story.

Yeah, but...

That's still a shitty return compared to, say, the DJI over the same time period.

SPY came out just before Eastman Chemical was spun off and it's done 2x as well.

MoonLiteNite

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Re: Disney Stock : Buy now?
« Reply #18 on: October 20, 2016, 02:33:34 AM »
Follow MoonLiteNite's advice if you want to maximize transaction fees by employing shaman technical analysis.
Fees suck, taxes suck, but when you make 1000$, and spend 40$ in fees and  200$ in taxes, it still a nice nearly no work pay day :)

MoonLiteNite

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Re: Disney Stock : Buy now?
« Reply #19 on: October 20, 2016, 02:40:04 AM »
I do not know how to read the books, but the TA for disney is still a little iffy, on the long term side of things.
If you do buy in now, for long term (3 months or more), i would put a stop loss in around 85. You would be risking a bit, and i never trust TA for long term trades.
I personally would not buy for long term until the price hits around 86, then use a 85 stop loss and look for the slow rebound, that would be more of a mid term swing though :D

Short term, a day to a few weeks, i would buy in if the price hits 91.40 and put a stop loss at 91.30. Looks like if it crosses the 91.40 it has a good chance to at least make it to 92.50. So small 10 cent risk for a 1.10 upside, not a bad RvR! I actually may do this myself....

I can never tell if people are joking or being seriously when they talk TA.

Why? TA works, it is about how people think and how people react to numbers.
Watch level 2s as a stock has its  200sma going over its 13sma. HUGE chance that stock is going to drop in price like a rock.

Or when a stock hits its 52 week high and sits there for 2mins, more than likely it is going to drop back down, then go back up, and it can cross that  52week high, a good chance it will shoot past it, if not, it will have a major drop.

Nothing is for certain, and it is all just based on people's minds and the herd BAAHHHHHH
But the main thing, is to use stop losses, get in on trades where you have a higher chance at being right, and IF you are right, you gain 5%, and if you are wrong, you get out after 1%. Just like making money with poker. All about the math.

edit:
And if TA didn't work, there would be no people who make a living off day trading. Not everyone can do it, but if you understand the math and the minds behind it, you can do it. Just have to learn.




Vagabond76

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Re: Disney Stock : Buy now?
« Reply #20 on: October 20, 2016, 04:43:35 AM »
we need mrpercentage.

I hope he didn't get banned :'(  but he's been silent for a long time now. Gotta lay off the drunken posting...

He does not appear to be a member anymore. The mods have gotten way more sensitive lately. I'm sure I will be "watched" in perpetuity.

Jack

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Re: Disney Stock : Buy now?
« Reply #21 on: October 20, 2016, 05:05:42 AM »
The mods have gotten way more sensitive lately.

Glad I'm not the only one who noticed that.

greentea

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Re: Disney Stock : Buy now?
« Reply #22 on: October 21, 2016, 11:26:57 PM »
Hi ,

Do you think Disney stock (DIS) is a good buy currently. For holding it for a long time . Possibly 5-10 years or maybe forever.

My reasons:

1. Very powerful brand. I am 30 years old. I loved Mickey mouse when i was a kid . Kids growing up now also love mickey mouse and other disney characters. The brand is here to stay.

2.The brand is recognized globally . Their cable business is suffering currently . But they may recover out of it soon.

3. Pays Dividends .Although not much. It has scope to grow.

4. Stock is available at 16.5 times earning.

5. It is available at a discount of 25% of its recent high.

I agree that the Disney brand is truly staggering.  The classic characters like Mickey and Minnie, Pixar, Star Wars....it just goes on and on.  It drives huge profits in movies and television and merchandising, and drives traffic to their theme parks. Those parks are a big part of the brand themselves.  In one form or another, Disney will be around for decades, churning out profits from films, merchandise, theme parks, and anything else you can imagine that can have a character slapped onto it. 

The reason it's down at current prices is negativity over the cable television business, which was their most profitable area of business last quarter.  More and more people are cutting the cord and moving to cheaper streaming options. Disney has some crown jewels in the cable television business with the ESPN networks and their own Disney channels, but right now nobody seems to have a good idea as to how to value that part of the company. Believe it or not, a quick glance at the latest 10-Q shows cable revenues and profits were up 1% year over year last quarter, but I have no clue whether they can keep that performance up and it is obvious many in the market don't have confidence that they can.  Cable television represents nearly 30% of their revenues, at $4.2 billion last quarter, nearly as large as their theme parks and resorts business. Cable is also far more profitable at nearly 50% margins.

The dividend itself isn't a reason to buy a stock.  Sure, it imposes some discipline on management since they know they are expected to keep up those payments, but investors should be focused on total return, with the dividend one component of that return. The P/E of 16.5 sounds reasonable, but have you dug into the numbers to see if there are any unusual one-off profits or charges that are affecting that number? I haven't really looked at DIS in a couple years. I don't know whether the current price is a steal, fair, or overvalued, and wouldn't know until I did some serious reading.  I could then make different estimates on the future of the cable and OTA television business and see how those affect my valuation. 

I'm not trying to sway you one way or the other, just raising some points to consider.  If you're really in it for the long haul I think Disney has too many valuable assets for it to turn out badly for an investor, but like I said, I haven't really taken a good look at it in a couple years.

Preface:
I no longer own any DIS stock. The reason I bought and sold them is expressed succinctly by JetBlast. I made a small loss of 5%. I sold when it moved up a little bit. If I had held on to them, today I would have a loss of 11.5%.

With what I know now about the issues Disney has with ESPN and cable TV, I would not buy Disney. If you are still keen on riding the Disney wave, consider instead Electronic Arts and Hasbro. Two companies which have benefited from working with Disney through tie ins and merchandising. These 2 companies are "undamaged", that is are sound and do not have any issues unlike DIS. From their charts and income statements are doing well. I am not the originator or this idea. I read this some months ago on CNBC.