Disney
As it turns out, the view is mixed. Let's have a look at a few of the key sentiment drivers.
1. Analyst opinion
Analysts like Disney. Data from Capital IQ captures their collective feeling:
| Opinion | Number of Analysts |
|---|---|
| Buy | 9 |
| Outperform | 8 |
| Hold | 9 |
| Underperform | 0 |
| Sell | 0 |
| No Opinion | 0 |
Seventeen analysts have either a "buy" rating or an "outperform" on the stock. Another nine rate it a "hold," but none give it an "underperform" or "sell." For purposes of our exercise, it's fair to say that analyst sentiment leans bullish.
2. Insider buying
Next, we'll look at insider buying and selling. Over the past year, Disney insiders have sold $66.49 million worth of their company stock. During the same time period, insiders didn't buy a single share. (Data from Form4Oracle.)
It's important to note that insiders sell stock for a whole host of reasons -- to pay for a house or tuition, to diversify assets, and so forth. Also, Disney has a market cap of $77 billion, so $66 million of net selling isn't huge in relative terms. Still, it'd be nice to see any insider purchases over the past year. For purposes of this exercise, we'll classify insider buying/selling as bearish.
3. Guru buying
Next, we'll look at "guru" ownership of the stock, according to GuruFocus.
In the quarter ended March 31, seven gurus traded Disney -- two buyers and five sellers. The buyers were Ken Fisher and Chris Davis; Arnold Van Den Berg and David Dreman were among the sellers. The previous quarter told a similar story: four guru trades, all sellers.
With the majority in the "sell" camp, we'll classify guru sentiment as bearish.
4. Retail investor community sentiment
For retail investor community sentiment, I turn to Motley Fool CAPS, our proprietary stock rating system. CAPS generates ratings on a one- to five-star scale, with five stars as the highest ranking, indicating that the Fool community believes in a stock's future. Disney has a mostly bullish four-star rating.
5. Short-sellers
Next, we'll look at whether short-sellers are circling the stock. There are 38.7 million Disney shares sold short, according to Capital IQ. As a percentage of shares outstanding, that's a short interest of 2.0%. That's fairly low, so for determining sentiment, we'll classify the low short interest as bullish.
6. Does Buffett own it?
This is the "cherry on top" test, and in this case, it's a no: Berkshire Hathaway doesn't own shares of Disney. Berkshire once did, but sold Disney in the 1990s.
Adding it up
The consensus opinion on Disney is mixed. Analysts and the CAPS community like the stock, and in another bullish sign, short-sellers are staying away. But gurus and insiders are bearish, and the company fails our cherry-on-top test -- Berkshire ownership -- as well.
Of course, you can't base an investment philosophy on who likes or dislikes the stock you own, and even a consensus bullish opinion can sometimes be a scary thing. Quoting Buffett: "A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful."
The purpose of this series of articles isn't to make a definitive buy-or-sell call on Disney. Rather, by looking at a stock's sentiment, the goal is to help you place your own opinion of it in a broader context.
One final thing: If you want to keep tabs on Disney's movements, and for more analysis on the company, make sure you add it to your Watchlist.
