Feeling I should buy at least one more stock at reduced prices during this market sell-off, I decided to buy 150 shares of Disney and I got it at a price of $102.47.
Disney has had a bit of a rough time since its last earnings report that scared some investors. The stock came off its high of $122 and got hit hard along with many other media stocks. Add to that the insanity of Black Monday and the market panic and you have the stock down about 14% from its highs.
Content Is King And Disney Has It!
Without a doubt, Disney is the gold standard of media stocks and that will not change anytime soon. They own ESPN, the Star Wars franchise, the Frozen franchise, Pixar, and countless other entities (you can find a big list here). The Disney company has been woven into our society for many generations and it is popular world wide as well. Not a bad company to own stock in!
There will be a new Star Wars movie this December and the hype surrounding it should reach deafening proportions in a couple of months. That could move the stock higher at least a little bit. And sometime in the future we have Frozen 2 to look forward to which is an eagerly anticipated sequel to the movie any parent of small girls has been forced to watch countless times.
We hear so much about Amazon Prime, Netflix, and other content distributor services that are becoming so successful. One by one they realize that content is the most important ingredient and they are starting to spend 100’s of million dollars producing their own shows. That is what makes Disney so valuable as no company can match its catalog of all the movies, cartoons, and invaluable franchises that make money year after year.
The Way We Consume Media Is Changing
After the last earnings call, investors seemed to be particularly worried about ESPN because subscribers were down. That sports channel is one of the biggest properties in all of television and it is a must have for any male who likes to watch sports. Cord cutting might be playing a part in that subscriber decline as all media companies face the reality that consumers are tired of cable bundles.
But I am confident that with time, Disney will figure out how move forward and market ESPN to its fullest potential. It might try offering a stand alone $15 a month service through Apple TV like HBO has successfully done and I would love that as I am a cord cutter myself.
In the end, I bought these shares of Disney for a long term hold and feel happy I got them well off their highs. The stock pays about a 1.9% dividend and trades at a P/E of close to 21.5. With the recent volatility of the stock market, there is a reasonable chance we may experience another sell off/panic of some kind in the near future and it that does happen, I plan on buying more Disney stock maybe at the $90 to $95 range.