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February 25, 2008 – 7:27 am | by BizIntel
I bet you wouldn’t have guessed the Walt Disney Corporation (NYSE: DIS). If you’re like me, the name Disney immediately brings to mind an amalgam of animated cartoons, theme park rides, and lovable rodents. However, while having the market cornered in the rugrat space, Disney is actually a well diversified media giant that derives over half of operating earnings from its media networks and assets. Surprisingly, these networks include ABC, ESPN, SOAPnet, as well as equity stakes in Lifetime Television, and A&E.
Durable Competitive Advantage at a Discount
According to Barron’s Michael Santoli, the stock has fallen to unjustifiable lows as of late and is literally “the cheapest it’s been in 20 years”. Indeed, it certainly seems fairly cheap given a trailing P/E of 15.7 vs. the broadcasting / cable TV average at 19.2 and the S&P 500 at 18.3. While I can understand why investors may have unloaded the stock as fears of a consumer led recession continue to mount - I still see this as a possible long term opportunity to invest in a company with a significant durable competitive advantage.
Disney is Deeply Entrenched
Really, there is no denying that Disney permeates every aspect of our lives. In fact, several months ago I made the decision to buy a Blu-Ray player over an HD DVD player. Why? I read that Disney was on board exclusively with Sony’s Blu-ray format. The thought of parents having to explain to their kids why they couldn’t buy the 47th sequel to The Little Mermaid seemed like a nightmare waiting to happen. And, lo and behold, HD DVD is (ironically) going the way of Sony’s Betamax.
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February 22, 2008 – 7:59 am | by BizIntel
Since it’s Friday, I thought I’d take a break from the normal stock market news and talk about investing in a different market: Real Estate. So, not much has changed: the economy looks like we’re headed for a recession, credit markets remain tight, and inflation is gradually emerging as a dark cloud on the horizon. However, sometimes opportunity may exist in even the bleakest of markets - even real estate.
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Tags: Investing
February 20, 2008 – 7:45 am | by BizIntel
Inflation as measured by the Consumer Price Index (CPI) came in at 0.4% growth, above market expectations for a 0.3% rise in prices.
I’m only reporting the overall CPI number here, as this includes both energy and food prices. The “core” CPI number excludes these items, but I believe this distorts the impact to consumers (hey, we all have to eat and most of us have to drive to get to work).
Housing Starts
Furthermore, housing starts came in slightly under expectations at 1,012 K for January vs. consensus estimates of 1,015 K. A thousand more, a thousand less - it doesn’t matter. The bottom line is that we are continuing to see a weak market for housing due to the collapse of the credit markets. Unfortunately, this will probably continue for some time.
February 20, 2008 – 7:18 am | by BizIntel
Investors are waiting for key inflation and housing numbers due out at 8:30 EST today. Per Briefing.com, Consumer Price Index (CPI) data is expected to show prices increasing 0.3% in January vs. 0.4% in December. In addition, housing starts are expected to come in at a tepid 1,015K vs. 1,004K in December. Futures are already trading lower in anticipation of the news - we’ll stay glued to the stock market news wire and provide the actuals as soon as they are released.
Tags: stock market news
February 18, 2008 – 7:23 am | by BizIntel
These days, any mention of the housing market in conversation usually elicits a prolonged groan (especially if you live in California or Nevada). Homebuilders nationwide are feeling the pinch of a tight credit market, falling land prices, and mounting inventories. However, while the outlook for real estate is pretty dismal, times like these always make me ask myself: What would Buffett do? The answer? He would start looking for well managed, undervalued companies that he could pay bottom dollar for. While I don’t think now is the time to buy by any means, tenured and cash rich companies like MDC Holdings (NYSE: MDC) may have a place on my watch list moving forward.
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Tags: homebuilders, housing market, mid cap stocks