Who would win in a fight-Captain Picard or Captain Kirk?
When the sci-fi show Star Trek: The Next Generation came out in 1987, I was 11 years old. I was introduced to the world of Star Trek a year earlier and I was hooked. My classmates knew I was obsessed with the show and asked me that question. I was appalled. To me that world was a place to escape reality, which was full of bullying, backbiting and conflict among friends and allies. In that world, the good guys fight bad guys… not each other. However, the question echoed down through the decades of sci-fi fandom. Walt Disney (NYSE: DIS) capitalized quite well in this area of sci-fi/fantasy narration. Here's my take on the recent success of Captain America: Civil War.
The questions continued
Down through the years I was repeatedly asked whether or not Captain Picard or Captain Kirk would win in a fight. This line of inquiry expanded into other sub-genre mixes. In my three decades of sci-fi fandom, I was asked questions such as "Who would win in a fight?-Superman or Batman… Luke Skywalker or Captain Kirk… Enterprise or Millennium Falcon." You get the idea. Eventually comic book publishers took note of the line of inquiry, which culminated into the movies we are seeing in 2016. Captain America: Civil War has seen great success with $943 million in global box office receipts, as of this writing.
Disappointment turns into delight
At first I was a little disappointed while watching Captain America: Civil War. Captain America and Iron Man argued over allowing government oversight of their team. Captain America came off wanting to be above the law, which I found distasteful. Also, I didn't like how the Avengers split in two and followed either Captain America or Iron Man into battle against each other.
Spoiler alert - the following paragraph reveals some plot lines of Captain America: Civil War.
Serving as a catalyst for this, was Captain America's wartime buddy Bucky Barnes and accusations surrounding the assassination of Black Panther's father. This caused Captain America to go rogue in proving his old friend's innocence. Ultimately, Captain America overpowered Iron Man answering the question of who won that fight. The redemption came toward the end of the film when it was indicated that the villain, though defeated, rendered irreparable harm to the Avengers team. Hard feelings remained, indicating a permanent division now remains.
What does this mean for investors?
The success of Captain America: Civil War indicates Walt Disney's ability to keep its finger on the pulse of comic book and sci-fi fandom. Staying in touch with what the customer wants represents the hallmark of business excellence. Walt Disney understands the nature of the ongoing inquiry and imaginings surrounding superhero battles and acted accordingly. Fans wanted to know and, in the form of Captain America: Civil War, Walt Disney delivered.
Importantly, Walt Disney indicated that it understands fans, such as me, who disliked the hero versus hero concept. Broadly speaking, Walt Disney understands that compelling content will serve as an important differentiator for the foreseeable future in this increasingly efficient and commoditized world. Walt Disney's story quality emphasis even extends into its network programming.
I see no reason to change my bullish thesis on Walt Disney despite media concerns over cord cutting. Walt Disney's management is well aware of the transitions going on in its business and possesses the resources necessary to adapt. Walt Disney currently trades at a P/E ratio of 18 versus 24 for the S&P 500 making it undervalued. This company definitely deserves a second look.
Disclosure: I am/we are long DIS.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.