One of the great maxims of traders and Wall Street pros is to follow the "smart money."
I'm not much for the thesis that institutional shoppers tend to make smarter investing decisions, but many of you who've read my ruminations on insider buying say you'd also like to know how the Big Money is betting. Your wish is my command.
Next up: Walt Disney
Foolish facts
|
Metric |
Walt Disney |
|---|---|
| CAPS stars (out of 5) | **** |
| Total ratings | 4,673 |
| Percent bulls | 92.9% |
| Percent bears | 7.1% |
| Bullish pitches | 707 out of 771 |
| Highest rated peers |
Madison Square Garden, DreamWorks Animation |
Data current as of March 7.
No brand is more closely associated with children's entertainment that Walt Disney. I should know; my three kids take daily tours of the Disney Channel. They're most often seeking Wizards of Waverly Place or Good Luck, Charlie, but our kindergartner still enjoys the Toy Story movies and Phineas and Ferb as well. The House of Mouse has us trapped.
And we're not the only ones. According to the latest survey from License Global magazine, Disney Consumer Products is the world's top licensor with $27.2 billion in retail sales generated from its imprints. To understand how impressive that is, consider that second-place Iconix Brand Group
Nobody does a better job of monetizing fantasy. But don't take my word for it. Just look at Disney's top 10 movie hits compared to rival studio DreamWorks:
Disney
|
Film |
Domestic Gross* |
Release Date |
|---|---|---|
| Pirates of the Caribbean: Dead Man's Chest | $423.3 | July 7, 2006 |
| Toy Story 3 | $415.0 | June 18, 2010 |
| Finding Nemo | $339.7 | May 30, 2003 |
| Alice in Wonderland (2010 remake) | $334.2 | March 5, 2010 |
| The Lion King | $312.9 | June 15, 1994 |
| Pirates of the Caribbean: At World's End | $309.4 | May 25, 2007 |
| Pirates of the Caribbean: Curse of the Black Pearl | $305.4 | July 9, 2003 |
| The Sixth Sense | $293.5 | Aug. 6, 1999 |
| Up | $293.0 | May 29, 2009 |
| The Chronicles of Narnia: The Lion, the Witch and the Wardrobe | $291.7 | Dec. 9, 2005 |
| TOTAL | $3,318.1 |
Source: Box Office Mojo
*In millions.
DreamWorks
|
Film |
Domestic Gross* |
Release Date |
|---|---|---|
| Shrek 2 | $441.2 | May 19, 2004 |
| Shrek the Third | $322.7 | May 18, 2007 |
| Shrek | $267.7 | May 16, 2001 |
| Shrek Forever After | $238.7 | May 21, 2010 |
| How to Train Your Dragon | $217.6 | March 26, 2010 |
| Kung Fu Panda | $215.4 | June 6, 2008 |
| Monsters Vs. Aliens | $198.4 | March 27, 2009 |
| Madagascar | $193.6 | May 27, 2005 |
| Madagascar: Escape 2 Africa | $180.0 | Nov. 7, 2008 |
| Shark Tale | $160.9 | Oct. 1, 2004 |
| TOTAL | $2,436.2 |
Source: Box Office Mojo.
*In millions.
Disney has collected almost $900 million more in domestic gross box office receipts than its closest peer. To be fair, Disney's side of the ledger includes a mix of live action and animated features. And yet the point remains: the House of Mouse has a long history of generating big gates from big features, and then incorporating theatric successes into its other franchises -- from the tube to theme parks. Fools like the long tail.
"New films, Pixar, Disney channel, cross-marketing. There are so many channels for growth here that the future looks very bright. The management team is now top-notch and taking care of the business. Don't doubt the Mouse," wrote Foolish investor mwlove last month.
Institutional ownership history
|
Top Owners |
2008* |
2009* |
2010* |
Latest* |
|---|---|---|---|---|
| Fidelity Investments |
93,617,031 |
101,397,416 |
96,523,481 |
96,523,481 |
| BlackRock |
13,787,713 |
89,762,920 |
89,542,407 |
89,542,407 |
| State Street Global Advisors |
73,780,326 |
70,199,999 |
72,921,696 |
72,921,696 |
| The Vanguard Group |
56,977,637 |
61,851,618 |
66,284,226 |
66,284,226 |
| T. Rowe Price Group |
14,907,966 |
36,331,746 |
43,146,094 |
43,146,094 |
| TOP 25 TOTAL |
599,861,610 |
727,375,039 |
789,216,064 |
789,216,064 |
Source: Capital IQ, a division of Standard & Poor's.
* Indicates the number of shares owned.
Most institutional investors have taken that advice to heart. As a group, the top 25 have been buying steadily since 2008. On a quarterly basis, they briefly took some profits in the September quarter -- thanks largely to a sizeable sale made by JPMorgan Chase's asset management unit -- but then piled back into the stock in Q4.
More recent buyers include the highly regarded Fidelity Capital & Income (FAGIX) fund, which yields an astonishing 6.23% as of this writing. Morningstar says that manager Mark Notkin purchased 1.38 million shares of Disney last fall. The stock is up more than 17% since, outperforming the S&P 500 by seven percentage points.
Competitor and peer checkup
|
Company |
Institutional Ownership |
Insider Ownership |
|---|---|---|
| DreamWorks Animation | 70.95% | 21.30% |
|
News Corp. |
63.15% | 13.18% |
|
Time Warner |
84.25% | 0.07% |
| Walt Disney | 67.39% | 7.36% |
Source: Capital IQ. Data current as of March 7.
Interestingly, the rally hasn't pushed Big Money buyers to snap up all that remains of Disney shares. Indeed, compared to peers, the House of Mouse offers an attractive amount of institutional headroom. Insiders also own a healthy slice of the business, led by board member and former Pixar co-founder Steve Jobs.
But good as it is, the company's ownership profile doesn't keep me in Disney's stock. I've kept the shares assigned to me after the Marvel acquisition because I believe Disney will reap more from Marvel's properties that the comic book king ever would have on its own. Exceptional fourth-quarter results suggest I'm right.
Do you agree? Disagree? Let me know how you'd rate Walt Disney using the comments box below. You can also recommend other stocks for me to evaluate by sending me an email, or replying to me on Twitter.
And in the meantime, keep tabs on The House of Mouse by adding the stock to the My Watchlist tool, our free, personalized stock tracking service.
- Add DreamWorks Animation to My Watchlist.
- Add News Corp. to My Watchlist.
- Add Time Warner to My Watchlist.
- Add Walt Disney to My Watchlist.
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