Disney Stock Down?

[bwbuddy5]

I noticed Disney stock has gone down both of the last two days when the DOW not only went up, but set a record. So, what's going on with Disney now?

 

[OKW Lover]

Typical fickle investors. Can't judge anything by just two days of trading. DIS is still selling very near its record high.

 

[bwbuddy5]

Typical fickle investors. Can't judge anything by just two days of trading. DIS is still selling very near its record high.

That's funny. No, more of a conversation starter. As you know, it's highly unusual for Disney to react exactly opposite the market when the market shows large gains, especially two consecutive days, unless there's something going on with box office or theme park disappointment or something else that may effect it. Any other theories?

 

[StraightToDumbo]

Lower than expected attendance. Guidance for Theme Park revenue lowered. It'll be fine, just a blip on the ever-rising monster. ESPN, however, is killing them.

 

[onetoescape]

Also the Apple rumour as died a death as well

 

[bwbuddy5]

I was asking mainly because of something I heard from my investment advisor. Since none of you have brought it up, I'll ignore what he said (although, it will be interesting to see what happens this week)

 

[StraightToDumbo]

Long term they'll be just fine. It's a limbo situation. The bar is too high right now. They'll tighten belts and get back to slow rising, dividend paying performance.

 

[maltdizzy]

It's weird what will affect shifts in stock. Not saying it is, but this can be something as seemingly innocuous as Wonder Woman also demonstrated the Marvel no longer has a monopoly on superhero movies with a solid "A" Cinemascore.

 

[bwbuddy5]

Ouch

 

[Zooey72]

Disney stock has relatively little to do with the parks or the movies. The reason the stock has been doing badly is because of ESPN and people cutting cords. Over 1/2 the income Disney makes is from ESPN, and it is doing quite badly. The parks and movies are what is stopping the stock from tanking even further than it already has.

 

[lockedoutlogic]

Disney stock is overvalued/being propped up anyway...to be fair

 

[tachyonbb]

Disney's PE ratio is less than many of the other corporations in its sector, indicating that it is a good buy. Many people who actually know the market thinks that Disney is still a good buy. ESPN will continue to be a drag on their earnings but even when that is taken into account it is a good buy. Listening to someone who worked at a Disney store cash register for stock advise is not advised.

Locked up, please document where Disney stock is "propped up" Please quote respected financial advisors.

We bought our first Disney stock in 1989 at $6.00 a share. Followed up in 2002 at $15.00 and again in 2009 at $20.00. Did not hit the lowest price in any era but now it is over $105 per share. 2009-2016 made 5 times what we paid for it. Not a bad investment.

 

[Zooey72]

That depends on what you mean by "propped up". ESPN is dragging down the company as evidenced by how after the entire economy is up 16% since the election, Disney stock is still well below it's all time highs (and has been dropping recently). The way they have been jacking up the price of admission as well as the resorts is good for revenue (not complaining, merely stating people are willing to pay it and that is good for share holders). The movies are great money makers as well, Marvel and Lucas were great content investments. But all those things combined are offset by ESPN being a drag on revenue (or you could look at it that the parks and movies are propping up ESPN). If I could only invest in the movies and theme parks I would do it in a second, but buying Disney means you get stuck with ESPN. I have no reason to believe that people are going to stop cutting cords, if anything it will get worse. Disney will be a better investment when their main source of income is not ESPN, until than I don't care to own it.

I also do not like how Disney has a 1.4 beta (which means it is very sensitive to overall moves in the stock market). A year after 911 Disney stock lost 1/2 it's value, and while it has more than made that up that does reflect how vulnerable Disney is to world events.

Lastly, no one should own a stock merely because they like the company. That is foolish IMO. Use your head and not your heart when you invest. I own a good amount of CSV (carriage services, pretty much a funeral home stock). The reason I own it is because I believe in the somewhat near future it will make me $ because the baby boomers are going to start dying off. I enjoy going to Disney World, I don't enjoy going to funerals... but I am going to put my money where I think it will make me even more money.

 

[bwbuddy5]

You guys are much more intense than I meant to imply in my original post. I was referring to the short term; a friend who is an advisor (not my advisor), mentioned the stock when down 9 out of 10 days when the overall market was up, and speculated that it was because of something Iger said a couple of weeks ago. But to be honest, I can't remember now.

 

[bwbuddy5]

Good day Monday, lousy Tuesday - I think I'll practice arbitrage elsewhere

 

[Zooey72]

I wasn't trying to get too technical. My over all point is that if you want to make money go make money and be smart about it. If you like Disney go to Disney. One thing really has nothing to do with the other, unless you can divorce yourself from emotion and you truly believe that Disney is a good investment. Yesterday morning I dropped 4k into the Nasdaq because it had a dip over the weekend and I have made some $. In the evening I discussed with my wife where we were going to eat next year on our Disney Vacation (which ironically will run about 4k). There are few companies I will not invest in for moral reasons (Tyson chicken is one), but there is no company I will invest in solely because I like their product (to the point that liking the product plays zero role in my decision making process). I have money in Apple, but I am one of the few who do not like their products... but everyone else does, so that makes them a good investment and I have made some great money off of them.

 

[lockedoutlogic]

That depends on what you mean by "propped up". ESPN is dragging down the company as evidenced by how after the entire economy is up 16% since the election, Disney stock is still well below it's all time highs (and has been dropping recently). The way they have been jacking up the price of admission as well as the resorts is good for revenue (not complaining, merely stating people are willing to pay it and that is good for share holders). The movies are great money makers as well, Marvel and Lucas were great content investments. But all those things combined are offset by ESPN being a drag on revenue (or you could look at it that the parks and movies are propping up ESPN). If I could only invest in the movies and theme parks I would do it in a second, but buying Disney means you get stuck with ESPN. I have no reason to believe that people are going to stop cutting cords, if anything it will get worse. Disney will be a better investment when their main source of income is not ESPN, until than I don't care to own it.

I also do not like how Disney has a 1.4 beta (which means it is very sensitive to overall moves in the stock market). A year after 911 Disney stock lost 1/2 it's value, and while it has more than made that up that does reflect how vulnerable Disney is to world events.

Lastly, no one should own a stock merely because they like the company. That is foolish IMO. Use your head and not your heart when you invest. I own a good amount of CSV (carriage services, pretty much a funeral home stock). The reason I own it is because I believe in the somewhat near future it will make me $ because the baby boomers are going to start dying off. I enjoy going to Disney World, I don't enjoy going to funerals... but I am going to put my money where I think it will make me even more money.

Yeah...pretty much all that stuff...you're just more "wordy" about it than I have energy to be

 

[lockedoutlogic]

Typical fickle investors. Can't judge anything by just two days of trading. DIS is still selling very near its record high.

It's future is as fragile as it has been since the 80's though...because their golden profit goose is dead and they don't have a response...instead exploiting their other core segments in an attempt to disguise it so a certain executive can buy that chateau for willow before the real pain begins.

 

[Zooey72]

Dis all time high is 120.07, and it is currently at 106.14. That is an 11.6% disparity from its all time high. While it has dropped to under 90 in the last year or so and has recovered decently I think that is more a reflection of the overall market rather than anything Disney has done. As I stated before, it has a 1.4 beta which means that a swing in the market to the upside means that Disney should reflect a larger swing than the average company. Yet with the DOW hitting another all time high today Disney is still down 11.6% from its all time high. Worse than that, that all time high was hit in Nov of 2015, which means anyone who has had money in it has taken a loss for over a year and a half. I see no easy solution for Disney to gain any ground with ESPN. People don't want to pay for that content any more, and the stream of money from that is what made Disney the most money. Nobody would want to buy ESPN at a decent price because that is like buying a VCR right when DVD players became popular.

Also, to be fair a large portion of the blame lies with Disney. I do not know if you are aware but when you buy a cable package and are forced to buy channels that you do not ever watch (like ESPN) Disney jacked the rate up on ESPN more than any other channel(s). A big reason your cable bill is as high as it is, is because Mickey Mouse is forcing the providers to pay an inflated price for ESPN. Mickey was not content wtih shearing the ESPN sheep, he skinned him.

 

[Whatsthegoodword]

You guys are much more intense than I meant to imply in my original post. I was referring to the short term; a friend who is an advisor (not my advisor), mentioned the stock when down 9 out of 10 days when the overall market was up, and speculated that it was because of something Iger said a couple of weeks ago. But to be honest, I can't remember now.

Stocks are not short term investments - unless you want to lose your shirt. No stock goes up every day.