Disney's Global Magic
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It's a new year. Aside from the ritual of making resolutions, a fresh calendar ushers in a hopeful spirit for better times. I, for one, am optimistic that 2005 will be a better year for one of my holdings, Disney (NYSE: DIS).
In particular, I'm keeping my fingers crossed that a new global marketing initiative that the company announced last week will spur the theme-park operating segment. You can read all the details in the supplied link, but I'll go over some highlights.
The powers that be at the Magic Kingdom are tagging one part of the campaign with the evocative phrase "Happiest Celebration on Earth" (remember, we're talking global here, not just in Florida and California). The celebration marks the 50th anniversary of Disneyland's opening. Another advertising spot is christened "Coming Home"; the objective here is to get people who've been to the parks at one or more points in their lives to come back and relive some nostalgic moments… while spending a bunch of discretionary capital, of course.
I want this campaign to succeed and bring in as many park patrons as possible. Besides television networks such as ABC and Viacom's (NYSE: VIA) CBS, high-profile Internet destinations including Yahoo! (Nasdaq: YHOO), Microsoft's (Nasdaq: MSFT) MSN, and Google (Nasdaq: GOOG) will help spread the pixie dust.
Of particular interest to me was the mention of the opening of the new theme park, Hong Kong Disneyland. It's good to see that the developing investment is being given an opportunity to bear some fruit, although it won't open till September. As longtime Disney observer Rick Munarriz stated in an analysis of the last earnings report, the stock seems to be headed for a rebound. I read with slack-jawed marvel when he rhetorically inquired, "Is Disney the next great growth stock?" It then occurred to me that Disney's share price was slowly but steadily creeping back to my personal cost basis on the stock. And let me tell you, it took a lot of averaging buys to get me back to this point, as I had the bad luck to initiate my position back in summer of 1998.
Disney's stock might be heading in an upward trajectory, but it could just as easily falter; I've been through transient run-ups before. This time feels different, though. We have the global campaign and the anniversary asset (anniversaries are always great marketing tools), as well as the new Hong Kong destination, but I'm also looking for the divestiture of the Disney retail chain and its subsequent conversion to a royalty model to pay nice dividends in the coming year. Perhaps consumer products will finally add some real value to the bottom line.
I'm a long-term investor in Disney, so I'm willing to wait this one out for years. It's been rough going, but now that the dividend has finally been raised after remaining in a steady state for too many years, the new year might indeed be kind to the Mouse and its stakeholder charges.
More information on recent events concerning the Walt Disney conglomerate:
Fool contributor Steven Mallas owns shares of Disney.
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