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Strategies & Market Trends : Value Investing

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To: Spekulatius who wrote (33437)	2/4/2009 7:34:31 PM
From: Paul Senior	Read Replies (3) of 78687

I'm a holder of DIS and am considering adding here. Imo, the strength of Disney is now its ESPN network. It's growing worldwide, and it's one of the few places where advertisers can pick up a broad geographic in one place (men - young, middle, older.) DIS falls within my metrics for a value stock. Some people believe that the key to evaluating media stocks is free cash flow. I'll use that metric for discussion here, although it's not one I have been using in my own evaluation of DIS. I see that free cash flow is $3.9B: corporate.disney.go.com SI shows 1.85B shares out. si.advfn.com^DIS That makes free cash flow per share at about $2.10 sh. With DIS roughly $19/sh, a buyer of the stock now gets a free cash flow yield of about 11.5%. That looks decent enough to me to be a holder of the stock. Of course, if parts of the business do disintegrate - the cruise ships/theme parks/others, free cash flow dollars disappear and the stock won't seem like an attractive buy on that metric. I have a few shares bought at much higher prices than currently. Maybe I will average down with a small share buy now.

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