To be a successful investor, you need to get information from as many different perspectives as you can. So to bring you some fresh insights, I decided to go behind the scenes at our Motley Fool Stock Advisor newsletter to give you a sneak peek at some of the recent discussions going on there.
A Marvel-ous opportunity
Owning a winning stock is all fun and games ... until somebody makes a takeover bid for the company. That's exactly what happened to longtime holding Marvel Entertainment
While investors had to like the nearly 30% premium Disney's paying them for the cast of comic book characters, they mourn the loss of future growth opportunities. Yet even Fools aren't in complete agreement about whether the deal is good or bad for Marvel shareholders. As analyst Charly Travers pointed out, the House of Mouse is paying a hefty price for Marvel compared to the company's earnings guidance for 2009.
But Fool co-founder David Gardner says Disney's $4 billion bet simply confirms the value he saw when first recommending the comic book hero back in 2002, despite the concerns that naysayers have:
You can see much of the same misgivings, doubts, cautionary ratings, and commentary throughout the 7-year history of my recommendation -- riding all the way up the Wall of Worry, 13 times our money later. Lessons abound, investor.
Fortunately for Disney, it sees well past the short-term that so many of these people are either obsessed by or paid for. Little recognition is given as well to the extremely profitable business Marvel runs (high margins, great balance sheet), some of which I just bet Disney can learn from!
Disney is also gaining access to the teenaged-boy demographic that's been sorely missing from its lineup. Like Time Warner
Scrooge McDuck as CEO
So why is Marvel's management grabbing for the money pouch? High insider ownership is a trait we often look for in our recommendations because it aligns management's interests with shareholders', but Stock Advisor subscriber BrokeInTheBurgh thinks that here, it might have motivated a quick sale.
[CEO Isaac] Perlmutter owns something like 38% of the company and undoubtedly controls it. On paper, his Marvel shares make him a very wealthy man -- but only on paper. If he were to try to liquidate a significant portion of his MVL shares, the stock price would plummet, lawsuits might ensue, etc.
An embarrassment of riches
Complicating matters are Marvel's theme park agreements with Universal Studios; toy licensing deals with Hasbro
Disney has proven itself capable at weaving the assets of other studios into the fabric of its own iconic portfolio. Following the Pixar acquisition, it continued generating strong cash flows. There's every reason to believe it will do the same when it pulls Marvel into the fold.
