It is my understanding Disney is a licensee and just takes a cut of the action with no cost for development of the product. In the past the expenses were so high for development Disney was constantly losing money. Now it is turned around and the fees and royalties are a high profit. I believe it will grow exponentially in the next couple of years. Think Star Wars going forward and more Marvel. Disney makes a cut of all the products whether they produce them or not. Its a good thing.
It's going to take six or seven days to cover all the short positions out there. Based on about one third being covered on a good earnings report (and any additional upgrades) you could see a three to five percent spike up in the stock after hours on Tuesday and new record highs on Wednesday.
If the movie has "legs" , this week and next weekend could certainly tell the story. A strong hold on the box office into next weekend will be a true test in North America. There is little competition coming out next week which will likely be a big boost for the weekend again. The China release is just a week away with expectations of the most screens ever for a new release. Not forgetting Japan to follow.
It was only a few years ago Disney Interactive was just turning around after years of losses. Now it looks as if now and in the future Disney's Interactive Unit will be a huge bottom line winner with Marvel, Star Wars, Pixar and many of the Disney regulars. This is going to get a lot of traction going forward world wide. A rising division which is not getting much attention right now but it will by the end of the year.
Last Friday there was a few large trades aftermarket way above the closing. Over 200,000 traded after market and I suspect it was related to the Guggenheim upgrade today. Moving from neutral to buy and putting a new target price of 127 is a nice boost for the stock. Just how fast it will get there is anyone's guess. Guggenheim tends to be a bit conservative in its projections. I'm just going to stick with 130 by Star Wars release date.
You bought the 1,000 put meaning 10 contracts is that correct. So you are expecting Disney to close at less than 106.50 by the closed today (4/17/15)
The best time to buy a quality stock like Disney is a morning like this (4/17/15) when it seems everything is selling and for no "good" reason. Great place to be in or back in as the stock will rise into Avengers age of Ultron and Disney's May earnings announcement.
If you want more shares of Disney the best idea is to get in now on any pull back of the stock. A buy below 106 is a good opportunity and at 105 I suggest backing up the truck and load up. After the Avengers is released in North America and future earnings announcements it looks like 116 could be a reality very soon. If Avengers Age of Ultron opens bigger than expected money will flow into the stock and anticipation of Star Wars will be higher than ever. (not to mention a new theme park early next year). Expectations of future earnings similar to NetFlix will propel the shares 10% from here quickly. Next stop 116+.
Yes, I agree 90% is a very high occupancy rate. Every room occupied from this point is pure profit to bottom line. Since labor is the biggest cost, little labor has to be added when occupancy rises. It does give Disney more revenue with less discounting. With gas prices down substantially more cash in hand will drive visits to Disney theme parks and more per guest spending. All of this firms up bottom line but by how much is the question.
My guess is the spring and summer are going to be very busy for Disney and not baked into the current earnings. Let's hope Bob Iger gives positive guidance.
Disney has a very strong cash flow from the hotel and DVC properties. The DVC unit has had very strong months selling timeshare units. Between the Disney branded hotels and time share units there is well over 30,000 room units. When the resorts are busy they have huge cash flow and profits and when things are off the time share units churn out cash if used or not. I also see an increased cash flow from theme park ticket sales since they went to more electronic use. Less of the paper tickets being resold on the gray market. It just adds to more control of profits.
Expecting a conservative opening weekend of about 225 Million at the domestic box office. This is a low estimate from what the buzz is currently. The last Avengers was over 1.5 Billion in total box office. Last year estimates for Age of Ultron were an over the top 2 Billion total take. Hold your breath to see if this is a catalyst going into the earnings release for May and a boost in the underlying stock price. The base is very stable here and a pile of Disney cash for continuing the stock buy back at each dip. The charts are showing a consolidation here which should continue for a couple of weeks. Blue sky territory after this and anticipation moving toward Star Wars. (more about Star Wars in the near future)