Disney (DIS)
It hasn’t been a fairy tale for the Magic Kingdom since Bob Iger returned as Disney’s CEO, but if the most recent earnings call is any indication, things seem to be moving in the right direction. The impending purchase of Comcast’s remaining stake in Hulu will remove what has been a long overhang on the stock, and although the linear business remains soft, significant long-term opportunities have emerged. With its distribution model rapidly shifting toward streaming services, the Company may also sell linear assets.
The streaming business, for its part, is making big strides: more subscribers, higher ARPU (price hikes, ad-supported plans), and rigorous cost management have the business poised for profitability by 2024. The Company is also seeking strategic partnerships for ESPN, with potential suitors including sports leagues that can provide additional content or big-name tech companies that can help with marketing, tech, and customer acquisition. The theme parks business remains strong after COVID, with traffic recovering and guests spending more than ever. In response to pressure from activist investors management is controlling costs (now targeting $7.5 billion in cuts, up from $5.5 billion). A likely reinstatement of the dividend should help the stock price by attracting a wider investor base.
For more information on the Forgotten Forty, email via Substack or at info@boyarvaluegroup.com.
Important Disclosures. The information herein is provided by Boyar’s Intrinsic Value Research LLC (“Boyar Research”) and: (a) is for general, informational purposes only; (b) is not tailored to the specific investment needs of any specific person or entity; and (c) should not be construed as investment advice. Boyar Research does not offer investment advisory services and is not an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”) or any other regulatory body. Any opinions expressed herein represent current opinions of Boyar Research only, and no representation is made with respect to the accuracy, completeness or timeliness of the information herein. Boyar Research assumes no obligation to update or revise such information. In addition, certain information herein has been provided by and/or is based on third party sources, and, although Boyar Research believes this information to be reliable, Boyar Research has not independently verified such information and is not responsible for third-party errors. You should not assume that any investment discussed herein will be profitable or that any investment decisions in the future will be profitable. Investing in securities involves risk, including the possible loss of principal.
Important Information: Performance Information. Past performance does not guarantee future results. The reports in this sample are for informational purposes only and the performance of the stocks selected is not indicative of the performance of the entire Forgotten Forty. The performance of the stocks selected and the performance of the Forgotten Forty may in fact diverge materially. Additional information regarding the performance of other companies in the Forgotten Forty is available from Boyar Research upon request. This information is not a recommendation, or an offer to sell, or a solicitation of any offer to buy, an interest in any security, including an interest in any investment vehicle managed or advised by affiliates of Boyar Research. Any information that may be considered advice concerning a federal tax issue is not intended to be used, and cannot be used, for the purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter discussed herein. Clients of an affiliate of Boyar Research and employees of Boyar Research own shares in DIS.