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Strategies & Market Trends : Fundamental Value Investing

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From: Sergio H	7/21/2012 9:38:04 PM
	1 Recommendation of 4719

Disney is one of the stocks I nominated. Everybody knows Disney and some of the companies that they own are also well known, including ESPN, ABC, Marvell, Pixar and the Disney theme parks. A look at the chart and maybe you think this is a momentum stock, but its PE going forward is only 13. Looking over the other ratios, the book value is a little high at around 2x but not excessive, growth rates, margin and debt reviews indicate a good balance sheet. That being said just to establish that the stock is not expensive. So, without relying on metrics or valuation ratios which imply a price of $50-$52 per share based on its historical PE of around 15, or the chart that says up, what's going on with Disney and why I want it for our portfolio is that all of its divisions are executing despite the bad economy. This is a brand that people recognize for quality content. Going forward Disney has a roster of movies planned and continues to find ways to feed demand for content on all media outlets including smart phones and remote devices. They have a virtual monopoly on sports tv. There's plans to build a theme park in China. And more. Disney has done well with their acquisitions and divestures. This is a well managed co. selling at reasonable metrics. It likely will continue to excel in its established market niches, and develop new ones.

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