Friday, April 04, 2014

Disney Cable TV (and Diz Co.) On a Roll

This happy occurrence ...

Disney Junior widens lead over rivals

Nielsen ratings show Disney Junior (DIS) opening up a wider lead over Nick Jr. and Sprout.

For the first quarter of the year, Disney Junior had 459K total viewers, compared to 326K for Nick Jr. and 155K for Sprouts. The kids network is also showing growing strength with digital channels and consumer product tie-ins. ...

... has caused Disney stock to rocket upwards.

Which, in turn, has caused Wall Stree analysts to conclude ...

... At this point, [Disney's] valuation is rich. The underlying fundamentals of the company do not support the valuation going much higher.

While Disney is forecasted to continue to grow in the mid-single digits, the underlying return generating ability of the business does not support a higher valuation. As it stands, the valuation is above the historic average levels, and industry and market benchmarks.

Given the valuation, Disney is a short sale candidate because:

1) The intrinsic value estimate is $75 per share.

2) Recent financial performance is transient.

3) The primary degree bull market is "long-in-the-tooth."

I guess you can lose for winning.


Chris Sobieniak said...

Oh well, that's what we thought.

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