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The Time To Buy Disney Is Now

Aug. 06, 2018 8:29 PM ETThe Walt Disney Company (DIS)FOXA, FOX52 Comments
Rich Anand profile picture
Rich Anand


  • As it stands, Disney is a reasonably-priced value play.
  • The Media business is stagnating. But there is enough growth in the Studio and Parks segments, along with strong cash flow and balance sheet, to warrant a Buy.
  • With the acquisition of Twenty-First Century Fox, Disney is now truly the king of content, set up well to take on streaming competitors and become a growth stock.

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The Walt Disney Company (NYSE: NYSE:DIS) offers the rare opportunity of a reasonably-priced value play on the cusp of a potential growth play. Think Microsoft (NYSE: MSFT) pre-Nadella, when the technology giant was stagnating due to its perceived inability to adapt to the cloud. Microsoft has since undergone a successful pivot of sorts and the stock is racing towards the $1T mark. I see a similar shift happening at Disney in the next 2-3 years; however, even as things currently stand, it has enough dominance in the media landscape to warrant a buy.


Bob Iger has been a staple in the media business for over 45 years, serving leadership roles with Capital Cities/ABC and then Disney. During his time at Capital Cities/ABC, Iger worked under Tom Murphy, a CEO with Buffett-like mentality when it came to capital allocation. Particularly impressive about Murphy’s tenure at Capital Cities was the list of companies he acquired and successfully integrated into existing operations. For example, Capital Cities’ acquisition of ABC for $3.5 billion in 1985 - not only was this the largest media deal at the time, but ABC was three times the size of Capital Cities in terms of revenue.

However, Murphy’s track record spoke for itself, as he produced a remarkable 19.9% internal rate of return over a period of 29 years at Capital Cities (as compared to 10.1% by the S&P 500).

Upon Disney’s ultimate acquisition of Capital Cities/ABC, Iger assumed his current CEO position in 2005. In a very Murphy-esque style, he has significantly

This article was written by

Rich Anand profile picture
I manage my own publication called "Wealth Simplified" aimed at helping college students/recent grads better manage all aspects of their finances. My advice? Understand what you do not know. I analyze undervalued equities to manage my own portfolio, as well as offer investment advice to first-time investors. I am a value investor with the goal of isolating and holding a small number of positions indefinitely.

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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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