- Ant-Man shows that Walt Disney’s Marvel is as adept at dialogue as it is action.
- Ant-Man dominated the box office on its opening weekend.
- Ant-Man keeps the Marvel brand alive between major tent pole movies.
When my wife and I went to see Ant-Man I was skeptical of the plot. I was thinking, how can Walt Disney (NYSE: NYSE:DIS) and its Marvel studios spin an excellent story out of a relatively minor character in the Marvel Universe? Would anyone care about such a minor character?
Full disclosure here-I own shares in Walt Disney, which in essence makes me a part owner of the company, compelling me to take an interest in the financial success of this film. When I watched the film, I was delighted by the depth, reach and underlying message of the story. I came away with the feeling that Marvel's formula for success didn't waiver, with reservations. Here's why.
Excellent story quality
I have to confess that Avengers: Age of Ultron failed to impress me. The movie overwhelmingly exhibited what I call flash action scenes - quick, short scenes with a great deal of action. There were too few moments of meaningful dialogue for my taste. However, as a shareholder I didn't argue with the movie's nearly $1.4 billion in box office receipts. Clearly, Walt Disney knew better than I how to cater to the masses.
By contrast, Ant-Man was a slower moving motion picture. Ant-Man demonstrated the recipe of a well-written story. The movie had a moral undertone, and relationship dynamics, mixed with a dose of action thrown in here and there. In addition, it touched bases with other parts of the Marvel Cinematic Universe, which strengthened audience anticipation of other movies and should bode well for Walt Disney shareholders.
My delight turned to worry from a shareholders standpoint when I realized that Ant-Man didn't contain the constant and consecutive action packed scenes found in Avengers: Age of Ultron.
I thought, "This movie will flop big time."
Dialogue not obsolete yet
However, I was relieved when I discovered that Ant-Man dominated the box office with $58 million in box office receipts on the domestic front and $114 million on the global front over the weekend. Granted this was the lowest weekend opening since the Incredible Hulk in 2008, according to Fox News, and didn't meet projections, but I don't care. It's still better than my personal hopes. Apparently the movie consuming public at least partially agrees with me, with Ant-Man having better appeal to women and families.
What does this mean for investors?
Ant-Man represents what I call a "bridge the gap" film. While it may not bring in as much attention and the corresponding box office receipts, it serves the purpose of maintaining positive conversation about the Marvel brand and builds anticipation and excitement for the main films, such as Avengers and Iron Man. It also gives audiences a glimpse into other aspects of Marvel's fictional cinematic universe, building loyalty to the Marvel brand. This will compel people to purchase tickets at Walt Disney's theme parks, cruise lines, as well as affiliated merchandise, such as Marvel action figures.
Finally, if shareholders luck out, Ant-Man can contribute to growing earnings. The market, keenly aware of Walt-Disney's potential, currently assigns Walt Disney a P/E ratio of 26 vs. 19 for the S&P 500, according to Morningstar. However, if the stock price momentum slows enough, or if it corrects, the P/E ratio may shrink. If this happens, I will be buying more shares of the company.
This article was written by
Analyst’s 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.
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