Monday, May 19, 2014

"Time to get back to the basic tenets of my blog: PEG Ratio below 1.5 and Return on Equity 15% or higher. That road takes me right to Walt Disney Company (Symbol DIS)"

Dow Jones Industrial Average 16,491.31 (Down) Week Ending 05-15-2014

Well, it is time to get back to basics. That is what all of the good sports' teams do when they have a little losing streak and need to get everyone back in that "Successful" groove.

So, let's plug a hole in the line and add some:

Walt Disney Company (Symbol DIS, $81.05)

DIS has a lot going on and a lot of new cool stuff on the way. The movie "Frozen" has been a Revenue monster. "Captain America" is doing very well. All of these movies have items marketed around them. Looking ahead, Disney begins to leverage their investment in Star Wars with some new string of movies that will arrive on the scene.  These names come from the Hasbro Toy list:

2014: Rebels
• 2015: Episode VII
• 2016: Boba Fett
• 2017: Episode VIII
• 2018: Solo
• 2019: Episode IX
• 2020: Red Five

Movies combined with Merchandise combined with Games combined with mobile apps all wrapped into a giant snowball. Add ABC, ESPN, Theme parks that are featuring the "The Wizarding World of Harry Potter," two rides featuring the lands of Harry Potter at the Disney World Orlando, and you have a whirlwind of great stuff happening and growing.

So, here are the numbers. The PEG ratio on the company according to Y-Charts is 1.146. The Return on Equity currently is 15.89%.

Earnings per share: $3.38 for 2013, $4.17 for 2014 projected and $4.63 projected for 2015. That is a future PE of 17.

Disney pays a 1.06% dividend to add in to your pot of success.

How about the Return on the price of the stock? YTD price change has been 6.09%. The One Year return on the stock of 21.93% and the 3 Year stock price return is 98.02%. 

Zack's has a 2 "BUY" rating on the stock and IBD has the earnings ranking of "95" assigned to the stock. The Quarterly Free Cash flow is $1.826 Billion dollars.

Truth be told, this "Disney" idea was inspired when my work associate and fellow fantasy football league general manager, Kevin Miller, told me about the Star Wars series movies coming. All I could think of was the scrolling credits rolling forward into outer space and the huge success of the original Star Wars Movies. I was hoping that the numbers were as good as the story that was coming, and they were. I would rate this stock a "Buy".


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