Happy, happy, joy, joy! Can there be a funner time of the year -- for investors and children alike -- than the day before the House of Mouse releases earnings? That day's today, as we await the news on Disney's
After the news comes out, we'll have time aplenty to dissect it. But in these few hours before we begin obsessing over Disney's short-term progress, let's take a moment to review what investors think about it as a long-term investment. Our tool in this endeavor: Motley Fool CAPS, where we poll more than 28,000 investors for their views on well over 4,000 companies, Disney among them. Here's what Fools have to say about the company.
Up or down?
More than 1,400 investors have submitted opinions on Disney. The verdict: M-I-C ... K-E-Y ... B-U-Y.
Nintey-three percent of CAPS investors expect Disney to outperform the market, an opinion that rises in conviction as you drill down to our very best investors, the CAPS All-Stars. There, optimism tops the 96th percentile. That's good enough to earn this American icon four out of five possible CAPS stars.
Comparing Disney to other theme park operators -- just one of its many businesses, admittedly -- the House of Mouse is top o' the heap:
|
Theme Parks Group |
|
|---|---|
|
Disney |
**** |
|
Six Flags |
*** |
|
Great Wolf Resorts |
*** |
|
Cedar Fair |
*** |
|
CBS |
*** |
|
Anheuser-Busch |
*** |
Wall Street vs. Main Street
Wall Street's opinion parallels Main Street's on this one. Out of the seven Disney-parsing analysts we track on CAPS, each and every one rates the stock a buy. Seeming to confirm that opinion, the stock has outperformed the S&P 500 by about 10 percentage points over the last 52 weeks.
Bull pitch
The top-ranked CAPS pitch blends emotion with business with cold, hard facts, to argue that Disney is a clear-cut buy: "Disney is an incredible brand and a 'megantuan' presence in the entertainment industry. I think that American culture will continue to be a long term driver of Disney products worldwide. Even some of my high school students from a lower income region of Washington still vacation in Disney World/Land! Tough to argue with the allure. 2006 financials were outstanding -- while revenues climbed only 8%, net income up 33%, owner's earnings up 65%. I imagine that the EPS growth rate will eventually hit the lower revenue growth rate, but for a few years, I think moderately higher growth is likely. Using a 12% growth rate for the next 5 years, followed by 8% for the following 5, I value DIS between $40 and $57 per share (Dec 06). This represents a margin of safety between 19% and 43%. Great brand, good price, good mechanism for long term growth."
Bear pitch
Proverbially speaking, it's supposed to be elephants who fear mice -- but bears seem pretty nervous, too. About the only credible objections to the stock voiced on CAPS raise issues with a few of Disney's copyrights nearing expiration and worries that the stock is a bit pricey.
Who said that?
To learn the identities of the wise Fools who penned these thoughts and explore the plethora of additional financial data we've put together on the company, just click here.
Fool contributor Rich Smith does not own shares of any company named above. Disney is a Stock Advisor recommendation. Cedar Fair is an Income Investor selection. Anheuser-Busch is an Inside Value pick. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked 519th out of more than 28,000 rated players.
