Is Disney going broke

[SuzErwin]

Where's the best place to get stock advice on the Disboards?

LOL anyone who takes investment advice from anyone on a fan board deserves the returns they will get.

Totally not my point, but okay. You do what you want with your money.

All I am saying is that Disney has a LOT of headwinds right now. There are other blue chips companies in the world you know. Some of them are better positions RIGHT NOW.

But like I said. Your money.

Except your point keeps changing. First it was don't buy Disney, then it was don't buy Disney now, now it's...hmm. Still appears to be don't buy Disney now.

Of course there are companies with better positions right now. And there are companies with worse positions. Again, if your investment strategy is to run around looking for the jackpots that are going to pay off in the near future: do NOT invest in Disney. I agree with you. You will be unhappy. You should stay far away.

But for people who look for long term investments as part of a diversified portfolio, a majority of analysts have it as a buy. I've linked to four sites saying so and happy to link to more.

Disney's latest quarter earnings will be released on the 11th so the analysts' call could change, although a BofA analyst is predicting a good result, with tailwinds instead of headwinds.

Regardless, Disney has few - if any - competitors who can match its breadth/depth of intellectual property and ability to exploit it vertically, and that should allow the company to remain a safe and steady bet in the long term.

But I understand that's not your strategy. That's awesome. As I was the one who originally said: it's your money.

 

[TiggerBouncy]

Except your point keeps changing. First it was don't buy Disney, then it was don't buy Disney now, now it's...hmm. Still appears to be don't buy Disney now.

I never said never buy Disney. I own Disney. I have owned it since the 90's. I have flipped it a few times to lessen the tax burden, but I consistently keep SOME Disney and I always think it's part of a healthy portfolio. Nor did I say hmmm, maybe I am wrong, but it still seems like don't buy it.

I have been consistent that Disney is not a buy right now. I have always been talking about whether Disney is a good investment RIGHT NOW.

Please quote me where my point has been "changing" and has been anything other than "I believe eventually Disney will go up, but it's not a recovery stock and thus this is not the time".

But for people who look for long term investments as part of a diversified portfolio, a majority of analysts have it as a buy. I've linked to four sites saying so and happy to link to more.

You are again missing my point. There is an opportunity cost associated. You could buy Disney right now at $100 (making an example) and in 3 years it will be worth $105. OR you can buy a company that is better suited for a recession, and in 3 years have $300 which you can sell $150 of and invest in Disney at the current (still $105) price. Congratulations, you just almost tripled your money and you still have a diversified portfolio that is poised to take advantage of Disney at the right time.

Disney is a good long term, and I would not sell it (definitely a hold). But I would not invest in it right now.

Disney's latest quarter earnings will be released on the 11th so the analysts' call could change, although a BofA analyst is predicting a good result, with tailwinds instead of headwinds.

Regardless, Disney has few - if any - competitors who can match its breadth/depth of intellectual property and ability to exploit it vertically, and that should allow the company to remain a safe and steady bet in the long term.

Honestly, I don't give 2 whits about what the quarterly earnings show unless you are a day trader and looking to ride a short term good news story (which I do not recommend and you seem to be against as well since you keep talking about long term holdings).

I am more concerned with the future. We are headed into a recession or at least a very rough time ahead. All political nonesense, Reedy Creek, copywrite, etc, Disney as a company is never a good investment for a recession because the first thing that gets attacked is discretionary spending, and the Disney brand - ALL OF IT - is 100% discretionary. The only thing that Disney owns that is less affected by a recession are the media outlets (like ABC). But they just do not make or create any food, household goods, or provide basic necessities or other areas where people's money is going to be focused.

Housing is costing families 39% more than it did a year ago. Where does that budget come from? Against, quarterly results are the PAST. Those trips were already paid for. Most of the trips right now are made with last years dollars. If someone is at the parks this week, they are (almost certainly) doing it with money that was put aside in 2021. But belts are going to continue to tighten the longer the economy goes on and last years dollars are dwindling away. This years dollars and next years dollars are almost certainly going to go to essential items.

I would wait it out and put your money into companies that are geared for recessions - mainly essentials - food, fuel, household goods, insurance, and perhaps infrastructure and health care. When the economy shows signs up turning, THEN it's a good time to partition that (greater sum) of money and put it into Disney to build your portfolio out.

And yes, you linked a few people that said buy. Want me to link a few that say don't? Here's one and Here's another
Linking random analysts articles doesn't mean anything and it's not wise to chase analysts on the internet as an investment strategy.

Use your noggin. If you wanted to invest money right now, and if you read any newspapers or live in the real world, you can't help but to see the rising costs of inflation, utilities, home ownership, rent, gas, etc and the tight incomes are going to squeeze American's spending and it doesn't take a lot to figure out that Disney just isn't poised to take off in that kind of an environment.

Having said all that, if anyone here is honestly basing their choice to buy, sell, or hold stock from what they read on these forums, well.....

but all I can say is don't go off what any analyst you read tells you over your own common sense. Only EVER invest in what you believe in and what makes sense to you. In this case, I would suggest you consider long and hard where Disney's income sources are, and where people are likely to be spending in the next year and let that guide you.

 

[SuzErwin]

I have been consistent that Disney is not a buy right now.

And a majority of analysts disagree with you. Forgive me if I pay more attention to them than to someone named "TiggerBouncy" on a Disney fan board who has only offered their opinion.

Please quote me where my point has been "changing" and has been anything other than "I believe eventually Disney will go up, but it's not a recovery stock and thus this is not the time".

https://www.disboards.com/threads/is-disney-going-broke.3882124/page-2#post-63987071

You confused equity with debt and you floated the idea of a hostile takeover - which is highly unlikely looking at Disney's market cap - as reasons not to invest now.

And I apologize. You did say Disney stock would eventually go up but your reasons for not buying now were...not ones I agree with.

You are again missing my point. There is an opportunity cost associated. You could buy Disney right now at $100 (making an example) and in 3 years it will be worth $105. OR you can buy a company that is better suited for a recession, and in 3 years have $300 which you can sell $150 of and invest in Disney at the current (still $105) price. Congratulations, you just almost tripled your money and you still have a diversified portfolio that is poised to take advantage of Disney at the right time.

Or you could buy a stock and in 3 years have $55 because life is uncertain and stuff happens. Look at the pandemic. That's not a black swan event as global pandemics have occurred before, but it's the first really major pandemic in 100 years. Look at the subprime crisis.

That's the real opportunity cost. The stock market is gambling. Do you put your money into something analysts agree is an undervalued yet steady bet or not? Disney's overall business model appears to be sound; the negative pressures are mostly external.

So sure, you could put your money somewhere else and get a greater return - or a greater loss. It's the stock market. My point, which you have also missed, is that investing depends on one's strategy, needs, and risk aversion (or lack thereof).

Honestly, I don't give 2 whits about what the quarterly earnings show unless you are a day trader and looking to ride a short term good news story (which I do not recommend and you seem to be against as well since you keep talking about long term holdings).T

The quarterly earnings are an indicator of how well Disney is recovering from the pandemic and how well its business model can withstand similar shocks in the future. Streaming is Disney's hedge against a recession, should one be coming - and the indicators are mixed - so seeing their latest results vis-a-vis Netflix's stumble will be a data point for judging their future.

Since you keep harping on how well will Disney perform in the near future, I'd think that would be of interest. But maybe not. *shrug*

I am more concerned with the future. We are headed into a recession or at least a very rough time ahead. All political nonesense, Reedy Creek, copywrite, etc, Disney as a company is never a good investment for a recession because the first thing that gets attacked is discretionary spending, and the Disney brand - ALL OF IT - is 100% discretionary. The only thing that Disney owns that is less affected by a recession are the media outlets (like ABC). But they just do not make or create any food, household goods, or provide basic necessities or other areas where people's money is going to be focused.

Copywrite is the act of writing copy, i.e. marketing text. Copyright is the right to make copies. I'm betting Disney will use trademark law instead of copyright to police the use of its intellectual property when product starts falling into the public domain. They've already relaxed their stance of strict copyright policing with the advent of the internet and fan content.

Historically, entertainment companies have outperformed other sectors during economic downturns. In fact, Disney grew during the Depression thanks to lucratively licensing Mickey Mouse merchandise. People flocked to the movies during the Great Recession. Even after the Great Recession dragged on.

Disney parks were not materially hurt by the start of the Great Recession in 2008. As the Great Recession dragged into 2009, Disney did see a steep drop income thanks to overall softness in many of their business lines. Disney used promotional pricing for their parks while spend per visitor decreased, impacting their bottom line, but they kept attendance up and their resorts at 89% occupancy - and they beat forecasts, so the stock went up in response.

The linear TV businesses are, in fact, Disney's soft underbelly. Not only is linear TV slowly dying, but advertising spend - which is how Disney's linear TV businesses make money - tends to drop during recessions.

What should perform well in a recession is streaming. Plus movies, as long as people continue to return to movie theaters after the pandemic and Disney continues to put out films people want to see on a big screen. Theatrical film is the engine that drives ancillary businesses. And they will continue to receive TV affiliate fees, which is currently their largest single source of revenue.

When the economy shows signs up turning, THEN it's a good time to partition that (greater sum) of money and put it into Disney to build your portfolio out.

But Disney stock isn't performing well now. It's overweight - analysts believe the stock price should perform better in the future. So...why wait until the point when market conditions are ripe for Disney to perform well? That would mean the price will be climbing. That kinda defeats the, "buy low, sell high" thing. See: link above where Disney's stock price improved just for showing signs of coming out of the recession even though income was low.

And yes, you linked a few people that said buy. Want me to link a few that say don't? Here's one and Here's another
Linking random analysts articles doesn't mean anything and it's not wise to chase analysts on the internet as an investment strategy.

I said a majority. Majority infers there is a minority. Per WSJ, 21 of the analysts they track currently have it as a buy, 2 have it as overweight, and 8 have it as a hold. No one has it as a sell.

The analysts weren't random, unless you consider Merrill Lynch and JP Morgan Chase and Goldman Sachs and Credit Suisse random. Maybe you do. *shrug*

Use your noggin. If you wanted to invest money right now, and if you read any newspapers or live in the real world, you can't help but to see the rising costs of inflation, utilities, home ownership, rent, gas, etc and the tight incomes are going to squeeze American's spending and it doesn't take a lot to figure out that Disney just isn't poised to take off in that kind of an environment.

Or maybe I used my noggin plus quantified real world data to know that entertainment, while not as wholly recession proof as the myth makes it out to be, tend to do better in downturns than other sectors, depending, of course, on each company's strategy and how well diversified its bottom line is.

Having said all that, if anyone here is honestly basing their choice to buy, sell, or hold stock from what they read on these forums, well.....

but all I can say is don't go off what any analyst you read tells you over your own common sense. Only EVER invest in what you believe in and what makes sense to you. In this case, I would suggest you consider long and hard where Disney's income sources are, and where people are likely to be spending in the next year and let that guide you.

You do the same, friend!

 

[TsWade2]

Never mind. Disney going to be bankrupt and gone forever.

 

[Disney Bobby]

Not going broke. Just morally bankrupt.

 

[TsWade2]

Not going broke. Just morally bankrupt.

Bankrupt! I guess it's the end of Disney!

 

[drenalin'junkie]

Meh, consumers have proven time and again that they will support just about anything even if the companies policies are contrary to the consumer's stated values.
Take a look at all the biggest corporations with a little integrity and no one would support any of them. We've proven with rare exception to be free from that quaint trait.
If Disney fails it will be more mismanagement and a changing demographic not interested or able to afford the parks and merch and other entertainment outlets providing a better product.
We're going more to other parks more than Disney because the experience is a better product currently.

 

[ChipnDale79]

Not going broke. Just morally bankrupt.

there's a a lot of that around America right now, including those that claim they are more moral than others.

 

[TiggerBouncy]

Or maybe I used my noggin plus quantified real world data to know that entertainment, while not as wholly recession proof as the myth makes it out to be, tend to do better in downturns than other sectors, depending, of course, on each company's strategy and how well diversified its bottom line is.

You do the same, friend!

I am just going to leave it as (hopefully) we agree to disagree. If anyone were asking for my advise, I would personally pass on buying Disney because I feel there are too many headwinds. I get your point about in the past historically Disney has navigated those waters, but I do not have confidence in the leadership to overcome these issues (they haven't given me reason to believe in their ability). In the past,. Disney had much better leadership (IMHO) when headed into bumpy weather.

That said, you do you. Buy up - and for your sake, I hope I am wrong. Again, I do not believe Disney is ever a bad long term investment. Eventually it will recover. I'm just buckling in because I think it's going to be a bumpy ride before we get there.

 

[Disneychick75]

The Disney company made 20 billion dollars in the 1st quarter, so I'd say no.

 

[BaybeeYoda]

The Disney company made 20 billion dollars in the 1st quarter, so I'd say no.

That’s not insignificant. I read disneys killing it with their park revenues.

So perturbed that some ppl seem swayed by known misleading extremely biased arguable “news” sources (and uninformed random comments) over facts and data

I know there’s a current propensity towards Disney hate due to a perceived culture war. It’s really tragic bc Disney does a lot of good for Florida and is an iconic brand. There’s so much anger and misinformation nowadays;

 

[Aluminum Falcon]

I am more concerned with the future. We are headed into a recession or at least a very rough time ahead. All political nonesense, Reedy Creek, copywrite, etc, Disney as a company is never a good investment for a recession because the first thing that gets attacked is discretionary spending, and the Disney brand - ALL OF IT - is 100% discretionary. The only thing that Disney owns that is less affected by a recession are the media outlets (like ABC). But they just do not make or create any food, household goods, or provide basic necessities or other areas where people's money is going to be focused.

I think we are all lucky that the market typically prices things out on what they think will happen in the future. So i would say that a potential recession has already been priced in. I agree in the short term things are going to continue to hurt, but the "Dark Days" have already been priced in

 

[Jrb1979]

I think we are all lucky that the market typically prices things out on what they think will happen in the future. So i would say that a potential recession has already been priced in. I agree in the short term things are going to continue to hurt, but the "Dark Days" have already been priced in

I disagree. IMO the Covid shutdown will be nothing compared to what is coming. Right now people are still using cancelled vacations and saved money. Once that's done I think you will a down turn in the travel industry. With the price of gas and everything going up I just don't see how your average person can afford to travel

 

[Aluminum Falcon]

I disagree. IMO the Covid shutdown will be nothing compared to what is coming. Right now people are still using cancelled vacations and saved money. Once that's done I think you will a down turn in the travel industry. With the price of gas and everything going up I just don't see how your average person can afford to travel

again, all I'm saying is that the market has already priced that in. Just like it's already priced in Fed increases

 

[Jrb1979]

again, all I'm saying is that the market has already priced that in. Just like it's already priced in Fed increases

The stock market maybe.

 

[thealtonroute1982]

DIS is back where it was before the orgy of money printing began.

I suppose if the stock market really goes down, the theme parks might suffer a lot. Who's spending the big money at the parks? Are they people who have felt the wealth effect of rising stock prices?

 

[thealtonroute1982]

I disagree. IMO the Covid shutdown will be nothing compared to what is coming. Right now people are still using cancelled vacations and saved money. Once that's done I think you will a down turn in the travel industry. With the price of gas and everything going up I just don't see how your average person can afford to travel

I agree. I'm long stuff that people need - oil, ag products, etc. People don't "need" to visit a theme park. When your stock portfoilio takes a big hit, are you going to feel like spending $700 a night for at the Polynesian? I don't think so. If I'd bought DIS during the stock market mania, I would've sold it by now.

 

[TiggerBouncy]

I found this article very interesting. They predict that Disney will have a negative FCF (Free Cash Flow) going into next year despite it's sales. This says bad things about any return to a dividend and thus - as I mentioned - does not make Disney a very attractive stock right now.

https://www.msn.com/en-us/money/top...sedgntp&cvid=2a76e1636a1c452abbecc90dba83fc09

 

[Aluminum Falcon]

I found this article very interesting. They predict that Disney will have a negative FCF (Free Cash Flow) going into next year despite it's sales. This says bad things about any return to a dividend and thus - as I mentioned - does not make Disney a very attractive stock right now.

https://www.msn.com/en-us/money/top...sedgntp&cvid=2a76e1636a1c452abbecc90dba83fc09

They are running low on free cash flow to directly compete with Netflix and other streaming services, Netflix also did this for a while to build their library,(and just look at how that panned out for them). That article is a hit piece from what I can tell, they are telling you something that could technically be correct, but neglecting to tell you why that’s probably a good thing for the company

 

[DSLRuser]

pay attention...Disney is not going broke. The stock market is in a deep correction due to reasons that shall not be typed.

Disney stock will recover when new leadership is installed in government and at Disney corporate.