Why Should You Invest in Walt Disney?


Walt Disney (DIS) has been around since our childhood days, but now it’s a completely different company. Over the decades Disney has diversified their business within the consumer services space and at present they have over 166k employees. Even from an investment point of view you ought to love this company, just like old days!
They have a strong presence across media and entertainment space through their five key business segments.

Media Networks: They have a strong domestic as well as international presence in this segment through television broadcast network, radio networks and other digital operation. ESPN, ABC, UTV, SOAPnet and Disney Channels Worldwide are a part of this segment.
Parks & Resorts: Disney’s properties in Florida and California include Disneyland Resort and Walt Disney World Resort. These properties include theme parks, hotels, and a whole host of retail and entertainment facilities.
Studio Entertainment: This segment includes creating and acquiring content for distribution through home entertainment, theaters and television mediums. It does so through its own networks domestically and through joint ventures in international markets.
Consumer Products: This segment engages in licensing of trade names and content through different platforms globally. They also sell products directly to customers through retail and online.  
Interactive Media: This segment is all about Games. Disney produces and distributes consoles, mobile games and online games.

Quick Fundamental Check
At present the stock is trading around $60, much below its recent high but up more than 20% year-to-date. Its earnings growth is expected to be around 12% annually for next five years. Disney's current P/E ratio is around 18 times, Price/Sales around 2.20 and Price/Book around 2.70. Its annual sales are expected to cross $45 billion by 2015, and that’s a conservative forecast looking at its past five year trend.  Its dividend yield isn't all that attractive around 1.20%, but consistency is something that long term investors cannot ignore.

Quick Technical Check

(click to enlarge chart)


Using technical analysis to identify the best buy price for long term investors

Disney has rallied from around $15 in early 2009 to around $67 recently. The stock traded within a broad up-trending channel till the start of 2013 and finally broke out of it. This is a very bullish sign especially for a blue-chip stock. Now the stock is witnessing considerable selling pressure and is threatening to break below its 50 day WMA. If this happens, the stock could once again enter the trading channel and test its key moving averages i.e. the 150 day WMA and 200 day WMA, which are almost moving together.

My Final Take Along with Stock Price Forecast for 2015
Well, it’s too early to say it will actually fall to around $50 level in near future, but investors should look at every dip as an opportunity to accumulate more of this stock. It’s an excellent stock for your portfolio, and it should continue to generate stable returns in the long run.

I expect Disney to touch $100 mark by the end of 2015 and continue trending higher for many years beyond that. It’s a perfect stock for a retirement portfolio and one should invest in it with a view of holding it for at least five years.  

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2 comments:

  1. Looks as if one can only hope for a dip in Disney (DIS). Its back to around $67 high. That's why I keep saying "buy every dip" for stocks like this one.

    ReplyDelete
  2. Looks as if one can only hope for a dip in Disney (DIS). Its back to around $67 high. That's why I keep saying "buy every dip" for stocks like this one.

    ReplyDelete

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