Disney Drawback Could Mask Good Times
The market drawback is only distracting you from seeing the better times ahead.
Anthony Noto, an analyst at Goldman Sachs, told his clients that the summer pullback is a good time to buy stock in the Walt Disney Co. Why now? Because, Noto noted, Disney often underperforms the S&P 500 during the summer, as is happening this year, coinciding with seasonal uncertainty regarding consumer spending and rising fuel prices. In each of the last 10 years, Disney has underperformed the S&P from June 1 through Sept. 1.
But then, in seven of those years, this drought was followed by outperformance from September through December as uncertainty was replaced by consistent operating results, according to Noto.
"We believe this summer is a particularly attractive entry point given a 5% pullback and our expectations for double-digit growth for the back half of 2007 and into fiscal year 2008, with the potential for outperformance," Noto wrote.
Noto added that he continues to recommend investors buy Disney shares; he sees the company as one of the most attractive investments within the large-cap media space, with 25% upside to his 12-month price target of $43.
See the complete article here: http://www.forbes.com/markets/2007/0...markets18.html