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Travelers Holds Off the Dow's Fall

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Stocks are edging lower today after yesterday's Fed-fueled run-up. As of 2:15 p.m. EDT the Dow Jones Industrial Average (DJINDICES: ^DJI  ) has lost about 40 points, although it's still trading less than 100 points off its all-time high. Most stocks on the Dow are trending lower, but Travelers (NYSE: TRV  ) is holding back the index's losses today with a strong outing. Let's catch up on what you need to know.

Travelers gets an upgrade
Travelers has risen 1.3% on the day to lead the Dow's small corps of risers. Investors got a boost when Credit Suisse upgraded the stock from "market perform" to "outperform." The company said that Travelers still has room to grow in the insurance environment, and the stock has indeed done well this year, picking up more than 17% year to date.

Investors can partially thank a hurricane season that hasn't panned out as meteorologists expected. After many predicted a season of above-average activity, not one named hurricane has made U.S. landfall so far. The recent floods in Colorado and the earlier Yosemite fires have been the only major disasters this summer. However, with flood damage not covered by the private insurance industry, the recent losses in Colorado, while tragic and expected to cost up to $2 billion in total costs, won't count against Travelers and its competitors in the space.

The rather quiet hurricane season has allowed Travelers' rising revenue to take center stage recently. It's not a growth stock by any means, but it has modestly increased premium revenue over the first half of the year. If the company can see the same growth expand to its slipping investment revenue, it'll be on pace to delight investors in the future.

Disney's (NYSE: DIS  ) having a much different day. The entertainment giant's stock has fallen more than 2.1% to lead the Dow lower. Investors are reacting negatively to one piece of short-term news: Disney delayed the launch of its Pixar animated film The Good Dinosaur until 2015, meaning that no Pixar film will be on the slate next year.

While that might sound trivial at first glance, it's a potential blow to the company's sales and the stock's astronomical recent run-up. Pixar's animated adventures appeal to a wide audience to capture the valuable family demographic, and they have often performed well for investors, with two of the studio's past films grossing more than $900 million and ranking among the top 25 highest-grossing films of all time. While that kind of box office explosion won't happen every time -- let's not forget famous flops The Lone Ranger and John Carter -- Pixar, along with fellow Disney studio Marvel, has become a major cash cow for the company's movie unit.

Fortunately, while investors might have to wait until 2015 for the film division to shine once again -- what with the seventh Star Wars film also arriving in theaters that year -- this segment has become less responsible for Disney's overall performance. The company's media networks division has emerged as its top seller, commanding more than 40% of the firm's total revenue over the first half of 2013 and growing sales by nearly 6% year over year in that time. Disney's movie sales might slip in the short term with no Pixar films on the slate for next year, but don't expect this entertainment giant to struggle for the long term.

Disney's global reign
Disney's empire has stretched from the U.S. to seemingly every corner of the world, and its international reach is a great way to diversify your portfolio geographically. Profiting from our increasingly global economy can be as easy as investing in your own backyard. The Motley Fool's free report "3 American Companies Set to Dominate the World" shows you how. Click here to get your free copy before it's gone.

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DOW 18,143.45 -195.79 -1.07%
S&P 500 2,151.13 -20.24 -0.93%
NASD 5,269.15 -49.39 -0.93%

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Related Tickers

9/29/2016 4:35 PM
^DJI $18143.45 Down -195.79 -1.07%
DIS $91.80 Down -0.40 -0.43%
Walt Disney CAPS Rating: *****
TRV $113.87 Down -1.14 -0.99%
The Travelers Comp… CAPS Rating: *****