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Investopedia Advisor submits: There haven't really been any hit kids-movies out lately, and theme park attendance has been lackluster at best. For this reason, The Walt Disney Company's (NYSE:DIS) stock has been on the ropes. Still, I think the shares are worth buying at current levels, because over the long haul, I think the company is a winner.

Here's why:

First of all, look at the company's assets. Besides the countless thousands of acres of land it owns in Florida and California (at the two Disney theme parks we are all familiar with), it also owns parks in Tokyo, Hong Kong, and Paris.

Beyond that, it maintains some 104 Disney retail stores in Europe and another 315 across North America. And don't forget its legendary film production business. That segment has a long and storied history of turning out high quality, big revenue-generating motion pictures that are likely to thrill generations for years to come.

According to the company's financial statements, it records its attractions, buildings and equipment on its books (at cost), at more then $27 billion.

This means that even if you were just to value its physical assets, never mind its roughly $2 billion in cash, the company could likely fetch $14 a share. Put another way, the stock market has done very little to value the future earnings potential of this company.

Earlier this month, Disney announced that Walt Disney Studios will lay off some 650 employees as part of an effort to save money, and reposition the segment for future growth.

The fact is, in spite of its recent hit “Pirates of the Caribbean: Dead Man's Chest”, it put out a few stinkers, such as “Annapolis”, and “The Alamo”. (For the record, competitors such as Time Warner/Warner Brothers (NYSE:TWX) haven't faired much better.) So, the $100 million in cost-savings this realignment is expected to bring in is definitely a good thing, as it will give the company more money to fund what has long been it's bread and butter: kids movies.

Now to be clear, the motion picture slate for the company for the remainder of the summer isn't likely to be chock full of hits. But over the next year, the Disney brand is expected to kick out 10 movies (live-action and animated). A nice array of potential revenue generators! And if history is any indicator, these ingenious folks will get their act together, and come up with a big hit (among those releases) that will send the stock higher.

As far as its theme park business is concerned, I think it will do great over the long haul. I mean, I have two kids, so I have been to them all. Busch Gardens, Kings Dominion, Disneyland, Disney World, HersheyPark, Six Flags (NYSE:SIX), and a host of other smaller theme parks throughout North America. But the cleanest park, with the best accommodations, best package deals (for food, entertainment, and park tickets), and most friendly staff goes to Disney, hands down.

Of course, one could make the argument that with rising fuel prices, families are more likely to stay at home this year, as opposed to getting out on the open road and making the long, arduous trek to Florida or California. I agree. That is a problem. But remember folks that these fuel concerns won't last forever. And down the road, who is best positioned to reap the benefits? Disney.

Next, look at Disney's financial condition. It has, as I mentioned above, about $2 billion in cash and is generating positive operational cash flow. As a result, I don't think the company will have to complete and potentially dilutive stock offerings. Rather, they appear to be in solid shape to meet their debt service requirements, and other ongoing business obligations.

Over the next year, I don't expect too much from Disney. I think they will earn $1.48 a share in fiscal 2006 (ending September), and $1.64 a share in fiscal 2007 and its revenue growth will be similarly anemic: in the low single digits. But given its assets and what I think is its potential for double-digit earnings growth when the macro situation (and the company, but more specifically it's film business) gets its act together, I think the shares will trade materially higher.

In short, this stock, in my belief, is a classic buy and hold. I think that now is a decent entry point, and that over the next five years, the shares could return double-digit annual gains on the investment. Again, this isn't a home run stock, but given its assets, historic reputation, and potential for sustainable earnings growth down the line, I think it’s a must own for the long-run.

DIS 1-yr chart:

By Glenn Curtis, Contributor - Investopedia Advisor

At the time of release Glenn Curtis did not own any shares in any of the companies mentioned in this article.

Source: Disney Stock Currently Offering Cheap Admission