Is Disney a Magical Purchase?

With the NHL, NFL, and NBA seasons ready for a new year, the large conglomeration of Disney (DIS) looks to boost guidance for its many enterprises during the fall to winter seasons. As a Dow component, Disney has helped propel the recent rally by recently reaching a 52 week high in aims of a very favorable market according to recent trends. However, with a recession looming should you be involved in such a company who basis a lot of its products on consumer expenditures?

The answer to this question simply is yes. It is true that the economy should be headed for a recession in the near future, but it does not necessarily mean that shares of Disney should fall. Recognized as one of the premier brands to both children and adults, even if income of consumers will fall as usually accustomed too during times of slow economic growth, the mass-branding Disney has propelled with its ESPN and ABC brands along with its origin television, movie, and theme park basics should have no problem attracting customers. The real growth however, should be apparent and incredible in the next few quarters. With three of the major four sports beginning this season, along with new premieres on ABC as well as other Disney affiliates, profits should rise to new levels signaling strength in this industry. As incomes have not fallen significantly yet, and employment still remains incredibly high, margins should surprise future and current shareholders as a net positive more than anything.

DISNEY ENTERPRISE

Some investors may be hesitant to believe such sentiments, but by looking at current trends of how Disney tends to perform during the months from October to April, the signs almost all lead to positive indicators. Except for 2001, which may have been the result of a total derail, shares of Disney have tended to rise each of these months signaling from about a decade signaling strong capital gains for investors. If such a trend was not reason enough to believe in Disney, when looking a fundamentals, there is almost no other company that can match Disney's production. Posting positive margins on almost all levels each quarter each year along with a strong dividend ratio and PE ratio relative to its peers, the fundamentals for Disney should not be a negative detriment to any investor who studies this equity. It may be true that some of these margins may reduce in terms of percentages once the recession hits, but I believe that by April of 2007 any impact will be negligible in terms of investors warranting strong capital gains. Thus, I would strongly advise buying Disney at its current price but to be wary of keeping your shares past next April.

Is Disney a Magical Purchase?

Dennis Biray presents advice on all kinds of topics ranging from finance and investing to fitness to sports. For more information email him at dbiray@gmail.com, or to view other articles written by him visit http://www.biraynetworks.co.nr

DISNEY ENTERPRISE