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The Best Consumer Cyclical Stock? New Buy

PassiveCanadianIncome profile picture

My lowest sector in my stock portfolio has been Consumer Cyclical. After my recent sale of Cineplex (OTC:MCGPF) it really had a nice hole that needed to be filled. As I have stated before, this sector is my most-hated sector to invest in, but I really try to even out my portfolio sectors to keep me diversified. After doing a bunch of research and absolutely loving the potential of this stock, I made the buy.

Consumer Cyclical

Walt Disney Company (NYSE:DIS)

The company is an absolute powerhouse. I probably don't even need to talk about it. I was raised on Walt Disney, Lion King and Alladin were my go-to. My parents forked out the money to take me to the parks as a kid. I'm sure we will be doing the same as well with our kids, just like almost every family with kids.

Disney brought in 55.137 billion dollars (USD) in 2017. 23.51 billion dollars from its Media Networks, 18.42 billion dollars from Parks and Resorts, 8.38 billion dollars from Studio Entertainment and finally another 4.83 billion dollars from Consumer Products and Interactive Media. It is pretty safe to say the company is nice and diversified.

Media Networks

The pending deal with Twenty-First Century Fox, Inc. (FOX) (FOXA) will make it a content powerhouse. This will give it even more shows for one of its many streaming services! Netflix (NFLX) is going to have some serious competition. Disney keeps talking about creating a streaming service for all its Disney content, ESPN and possibly other content.

It also owns ESPN which has actually been a negative, but it is planning on starting a sports streaming service. Yes, a sports streaming service! This will be absolutely huge. A sports streaming service will have no competition and will do pretty well. I know so many people who keep cable for

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PassiveCanadianIncome profile picture
In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us.

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Comments (33)

grayhat profile picture
yup, couldn't have said it better. plus they just raised park fees. And people r still gonna go!!!!!!!!
in response to prfssr - you shouldn't be making buy decisions solely based on past performance. Disney having lagged the overall market growth of the last few years is a good thing for their forward looking outlook. The stock is undervalued by many measures. And the Fox acquisition directly addresses multiple concerns that have held the stock back for the last 3 years. Primarily, the market concerns about Disney is inability to compete with Netflix. With the Fox addition, Disney expands their streaming content, but more importantly they get a majority ownership interest in Hulu which gives them a platform to compete. With the additional movie studios being part of the Fox (21st Century) acquisition - Disney will be able to churn out more high grossing blockbusters per year. This on top of an already rock solid multi diversified business with the theme parks and licensing income on all of the character brands
One more thing from a guy who's been at this for 30 plus years. A hard and fast rule of investing is to not attempt to "time the market." Waiting for your price is doing just that.
I see a stock that's been range-bound between the low 90s and the mid 100-teens for three years now, and yields only 1.6%. Please someone tell me what's so appealing about that.
grayhat profile picture
bout time u came 2 your senses. long DIS. CAN'T GO WRONG.
Another possible huge revenue stream from the Fox acquisition - Disney gets access to the X-Men & Avengers brands and can make high grossing films combining characters across the multiple genres. Look no further than the success of Black Panther!
07 Mar. 2018
Actually the same strategy 👍
gbonesso profile picture
I'm long in DIS, I believe a lot in the opportunity of growth in the streaming area. Disney is the content king and will add a lot of good assets if the deal with FOX is made.
Jim Freebird profile picture
Disney is just to vast a multi-faceted company to be slowed down or derailed and just keeps steaming along. The cinema division is the PR face of the firm, exhibiting ultra unique concepts, exciting scripts and heart-warming universal appeal while gobbling up properties like Pac Man on speed pills!! Black Panther proves that Disney audiences run the gamete among a deep and varied reserve of the public who are seeking adventurous original stories and tales! Wow expect "Christopher Robin" the re-emergence of the real life Winne the Pooh characters to make a major splash also and The long anticipated Wreck it Ralph Sequel to do equally well!! With Mary Poppins, Solo and a Hot New Avengers movie also on the Dockett along with the existential fantasy A Wrinkle in Time, Disney is primed to keep that dominant PR face right in your smiling face!! Disney is a classic success story that weened kids of all generations on their fabulous story-telling prowless so as to have them keep passing the magical tales on to their kids. Disney has always stayed true to its clever entertainment brand ever refining and expanding it, becoming known the world over for fun, fantasy, creativity and escapism that delivers and leaves people hungry and craving for more!! Ever managing to find a Roger Rabbit up their sleeve or a Re-invented Pooh Bear, Jungle Book or Beauty and the Beast to cast a captivating spell with or a Wreck it Ralph or Toy Story or Gnomeo and Julliet original fable to take center stage they remain extremely relevant in their soon to be 100 year history! This without even mentioning the massive library of Disney family movies, specials, top notch touchstone films and TV programs that exist out there only to be piled on to by the equally extensive library of Fox Movies and Television assets!! Disney's future is bright with so much tradition and nostalgia to look back on and so many top notch franchises to blaze new trails with!! Buy and Buy some more!
Once the merger is complete, Disney will own 60% of Hulu by the way... so a new streaming service would not be needed.
I thought the same thing, but the chatter seems to be that Disney is still pursuing a non-Hulu streaming platform. Have no idea if they intend to spin Hulu off or kill it slowly?
I mean, they have a streaming system already in play (it streams all their stuff at all of their disney hotels and cruise lines) but like you said... will they spin Hulu off or kill it slowly is the real question.
vhild profile picture
07 Mar. 2018
I too formerly rejected stocks that yielded less than 3%. I´ve now come to my senses and plunged into DIS & SBUX.
I’ve always had DIS, but also recently just picked up SBUX.
I've been looking at SBUX too recently but the lack of growth over the last couple of years worries me. Any thoughts on the future, especially China?
06 Mar. 2018
14x forward PE is at 5yr low, happy to accumulate as many as I can at low 100s, the one stock to own forever
PassiveCanadianIncome profile picture
hey ever so true. just need more usd!
I like it best as close to $90 as you can get it. I buy any shares I can under $95.
PassiveCanadianIncome profile picture
i like it best at 45 bucks! haha $90 would be fantastic, heres hoping
Nah, I'd like $30 better.
Please refer to my above reply to Milford.
Long DIS. My daughter is 4 now and she owns the shares. When she becomes 18, I think she’ll be happy to have seen all that growth in her portfolio. Disney is very much a part of people’s lives not only in childhood, but always. Thanks for the review.
Milford55 profile picture
What do you think is the good price to buy at?
Right now a good time to buy in my humble opinion, but definitely my philosophy has been to add to my position any time it goes unde $100 a share. I agree with the author there is never a bad time to invest in this great company, so don’t wait too long you can always start a small position now and add on dips. If there is a bidding war over fox, the price may drop enough for a better entry point but I wouldn’t bet on it.
PassiveCanadianIncome profile picture
nice John thats fantastic! your daughter is lucky that your doing that for her. keep it up!
peterinjapan profile picture
Small typo: Alladin -> Aladdin
PassiveCanadianIncome profile picture
hey Peter my bad thanks for the correction.
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