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  1. #1

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    Apr 2005
    Concord, CA

    Why Analysts Are Wrong About Disney...

    At least according to Cramer...|&par=yahoo

    Why Analysts Are Wrong About Disney
    Posted By:Tom Brennan

    Companies:Walt Disney Co

    If you listened to the analysts, you’d think TV advertising revenue was The Walt Disney Co.’s only source of revenue. But that’s not the case.

    CEO and President Robert Iger, speaking to Cramer on Monday, said advertising represents only 20% of the money Disney [DIS 31.75 -0.33 (-1.03%) ] brings in, and that number’s been declining over the years, “purposefully.”

    “We believe that our portfolio of businesses, in terms of revenue generation, needs to be as diverse as possible,” Iger said.

    On top of that, Cramer pointed out, Disney is much more than just a media company. This is a business built on brands and franchises. And those brands are global, Iger said, and their success begets future success for each brand Disney launches.

    Another aspect of this company’s business that the analysts seem to have gotten wrong is the theme-park division. Many of them assumed this bad economy would hurt Disney, but the company reported strong quarterly numbers in this segment anyway.

    Iger said his theme parks are “great from a quality perspective and affordable.” Disney has put a lot of work into improving the visitor experience, whether that be on rides, in onsite hotels or interactions with the parks’ cast of characters.

    “That has made a big difference,” Iger said. “It’s given us the ability to attract more people and to be much more resilient in tougher times.”

    “This company at 14 times earnings is a travesty,” Cramer said of Disney’s cheap stock. “I think it goes higher. I think you should get on it before they report the next quarter.”
    Check out the 5 minute video with Iger included in this article.
    "If you build it right, they will come." - Bob Iger

    "I'm not a literary person. As far as realism is concerned, you can find dirt anyplace you look for it. I'm one of those optimists. There's always a rainbow." - Walt Disney

    "I don't care about critics. Critics take themselves too seriously. They think the only way to be noticed and to be the smart guy is to pick and find fault with things. It's the public I'm making pictures for." - Walt Disney

  2. #2

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    Los Angeles

    Re: Why Analysts Are Wrong About Disney...

    Cramer is one of the best stock guys out there and I agree, Disney is undervalued and a pretty good investment right now. Wallstreet always has a hard time understanding Disney and its potential. The interview with Iger is also very interesting and I recommend watching it.
    The Mickey audience is not made up of people; it has no racial, national, political, religious or social differences or affiliations; the Mickey audience is made up of parts of people, of that deathless, precious, ageless, absolutely primitive remnant of something in every world-wracked human being which makes us play with children’s toys and laugh without self-consciousness at silly things, and sing in bathtubs, and dream and believe that our babies are uniquely beautiful. You know…the Mickey in us.
    -Walt Disney

  3. #3

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    Jun 2007
    Köln, Germany

    Re: Why Analysts Are Wrong About Disney...

    Very good piece, thanks for posting!

    He is definitely spot on. Analysts seem to perpetually see dark clouds and vulnerabilities in Disney that never seem to eventuate. Even during the dying days of the Eisner years when almost every decision the company made seemed to be wrong, results were still quite strong and showed the amazing diversity and quality of offerings the company has. With Iger at the helm and good decision after good decision, it is amazing the stock isn't performing a lot better.

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