With shares of The Walt Disney Company (NYSE:DIS) trading at around $50.00, is DIS an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
C = Catalyst for the Stock’s Movement
Disney is up over 2,800 percent since its IPO. It’s one of the most well run companies in the world. Revenue is up over 60% over the past 10 years, and the stock is up over 120 percent during the same timeframe. The yield is currently 1.50 percent, which is icing on the cake.
Disney refuses to stop growing. This is a company that’s constantly looking for new opportunities. Its investments have paid off through the years. ESPN and Pixar have been two of their top purchases. Lucasfilm Ltd. might be added to the list of top purchases in the future. Looking ahead, Disney will release a new gaming initiative on January 15, 2013. It’s supposedly going to offer mobile and online apps in which Disney and Pixar characters interact, but this information hasn’t been confirmed. Disney has had a bad history when it comes to gaming. However, there is no doubt that they won’t stop until they nail it.
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The cruise ships are still somewhat new, and they required an enormous investment, but they are starting to pay off. The cruise ships are showing healthy margins and a return on invested capital. That being the case, can you predict Disney’s next move? If you guessed ‘build more cruise ships,’ then you are correct.
Disney has also been expanding its parks and adding hotels. Car Land will likely be a big hit for years to come. Aulani, a Disney resort and spa in Hawaii, is another new investment. So far, travelers have given it a 4.5-star rating out of five starts.
Let’s take a look at some numbers.