Intro

Walt Disney is a member of the Dow Jones Industrial Average and one of the most widely known brands in media. They have either partial or full ownership of brands like ESPN, Disney, Lucasfilm, Marvel, and Hulu.

The Company owns and operates the Walt Disney World Resort in Florida; the Disneyland Resort in California; Disneyland Paris; Aulani, a Disney Resort & Spa in Hawaii; the Disney Vacation Club (DVC); the Disney Cruise Line; and Adventures by Disney.

They will be a majority owner of Hulu once they complete their acquisition of 21st Century Fox. They launched ESPN+ in 2018. They expect to launch a new streaming service called Disney+ by the end of 2019.

Advertisements

Business Model

The Walt Disney Company, together with its subsidiaries, is a diversified worldwide entertainment company with operations in four business segments: Media Networks, Parks and Resorts, Studio Entertainment, and Consumer Products & Interactive Media.

Stats (as of 2/22/2019)

  • Market Cap: 171.81B
  • Closing Price: 115.25
  • Trailing P/E: 15.8
  • Forward P/E: 16.0
  • Quarterly Revenue Growth (yoy): -0.30%
  • Quarterly Earnings Growth (yoy): -37.00%
  • Total Debt (mrq): 20.66B
  • Total Debt/Equity (mrq): 37.22%
  • Current Ratio (mrq): 1.00
  • Levered Free Cash Flow (ttm): 7.09B
  • Forward Annual Dividend Yield: 1.59%

Stats referenced from Yahoo Finance.

Chart Action

Disney’s stock price has been consolidating for several years since August 2015. At a current price of 115.25, I think this is a great time to buy before a major breakout.

Risks

There are two major risks I’m concerned about.

  • Execution of Disney+
  • Acquisition of 21st Century Fox

These are two major changes that the company is embarking on. If either of these endeavors fail to deliver, it could cause trouble for the stock.

Should I Buy?

Walt Disney could be a great addition to a portfolio that needs some exposure to:

  • The Communication Services sector
  • Blue Chip stocks

Be sure to do your own research and determine for yourself if Walt Disney is a good stock for your portfolio.

How Much Should I Buy?

Here are some portfolio guidelines we Wolves try to live by:

  • Thou shalt not hold more than 35% in any one particular sector
  • Thou shalt not invest more than 10% of principal into 1 individual stock
  • Thou shalt make small purchases. The general rule of thumb is to spend no more than 2% of your portfolio on a single purchase and build up your position over time.

For an our updated portfolio management guidelines, click here.

The Bottom Line

Disney is a superb media company with leadership in many areas – sports, movies, television, news, and theme parks. It’s stock price has been consolidating for several years and it could be ready to break out in the next few years. Disney+ and its 21st Century Fox acquisition could be the catalysts that help it break out. Its P/E of 15.8 looks reasonable. I think it’s a buy.

Advertisements

Disclosure

I/we own shares of stock in DIS

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

Except for Wolves of Investing, I/we are not receiving any compensation from and do not have any business dealings with any companies discussed in this article.

stock of the month results

Every month I pick a stock that I believe has long-term potential to beat the market.

download my free investment ebook

Learn some of the tips that I wish I had known before I started investing.

Videos on stock investing

Check out our video series and gain valuable insight into investing.

0 0 votes
Article Rating
0
Would love your thoughts, please comment.x

Pin It on Pinterest

Shares
Share This