Stock Pick of the Week 11.19.18

in #money5 years ago

Successful investors buy cash rich trophy assets

Disney (DIS) is a special kind of company whose parks will be around for generations. Disney has intangible trophy assets as well with their intellectual property Lucasfilm, Marvel, Pixar, etc. The company has a century of history releasing adored movies and cartoons.

Disney also does a fantastic job with turning these assets into cold hard cash. This cash is then used to acquire or build new franchises and reward shareholders handsomely. Disney is producing a Free Cash Flow (FCF) of 18% of revenue. The average company is lucky to have FCF of 10% of revenue.

Buy and hold shares to collect a rising dividend payment and a larger piece of the company over time as Disney regularly buys back company shares with profits reducing the over all share count. Basically share buyback when done correctly provide you as a long term shareholder a larger piece of the pizza pie.

Disney is a buy today based on current share price and overall company fundamentals. Think about starting a position today and adding over the years to come.

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Disclosure: I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.

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I like Disney as a company. My kids love Disney products. There are many entertainment options available today. Do you think that Disney is prepared for that future?

I would bet Disney is around for another 100 years.

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