DIS

4 Friday Earnings Reports for Your Radar

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Let’s dig into a number of reports from firms in the news Friday.   Abercrombie & Fitch (ANF)   Investors in teen retail stocks are literally trying to catch lightning with respect to fashion trends. Predicting fashion in any demographic isn’t easy, but we’d point to anticipating teen behavior as the most difficult analytical proposition within any retail segment. It shouldn’t be surprising that fundamentals within the teen retail space are volatile, and Abercrombie & Fitch’s third-quarter update matched such a profile. During the period, net sales in its third quarter fell 12% and comparable store sales dropped 10%.   From the release: Sales during the quarter were below expectations with comparable sales in September and October being significantly weaker … Read more

Biggest News of the Day: Hasbro Beats Mattel and Jakks Pacific for Frozen Dolls

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Mattel (MAT) could have been thought of as a lock to win a new merchandising agreement with Disney (DIS) to sell the princess dolls of Elsa and Anna from the blockbuster animated movie Frozen. After all, Mattel is widely-known for its dominance in the doll category thanks to its Barbie line-up. If not Mattel, surely it would be Jakks Pacific (JAKK), who currently sells a variety of Disney fairies dolls, playsets, dress-up and accessories. But both of these companies lost out to Habro (HAS), which today landed a new strategic merchandising relationship with Disney Consumer Products and Frozen Properties beginning in 2016. We think this news is huge and further supports our valuation and dividend thesis on the Dividend Growth … Read more

Still Not Worried about Hasbro

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It was December 2011, and our team was considering adding either Mattel (MAT) or Hasbro (HAS) to the Dividend Growth portfolio. We could only add one due to diversification considerations (both are consumer discretionary physical toy makers), and both had strong dividends and were undervalued. Hasbro, however, had a slightly better Dividend Cushion score, and we opted to include its shares in the portfolio instead of Mattel’s. Though we discussed a great many different things about both of the companies, we’ve been very pleased with the selection of Hasbro into the portfolio, and we credit the Dividend Cushion methodology for providing the incremental relative insight into the stock-selection process. Since its addition, Hasbro has leapt more than 60%, excluding dividend … Read more

Valuentum Economic Castleâ„¢ Rating Update

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Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more

Thank you…

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By Brian Nelson, CFA Earlier this week, I received an email from a colleague and valued member of our services. I wanted to share it here for others to read. I haven’t included his name, but if he wants me to, I can add it in. It is filled with wisdom, experience and kindness. And it really made my year to read his words. The Valuentum community, I believe, is the best community of investors out there. Sir, if you do happen to read your own email on our site, we very much have appreciated your feedback, and we hope to continue to live up to your praises. We are dedicated, and our team has been rejuvenated by your words. … Read more

Patience Almost Always Pays Off

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A couple weeks ago, we outlined how patience and perspective are two very valuable qualities when it comes to investing. We used Google (GOOG) in that example, which spanned a longer time period, but we think Hasbro (HAS) is also a firm that fits the mold but over a shorter one. Many times investors use peer or industry performance to ascertain whether a closely-related firm will perform in similar fashion. Though there is undoubtedly an association between end market demand for each firm in a given industry, outside of the commodity-producing spaces, individual firm-specific dynamics can often counteract or mitigate what otherwise could have resulted in poor performance for all, indiscriminately. Mattel (MAT) sent shutters through the toy industry when … Read more

Disney Posts Solid 4Q Results; Sets Date for Star Wars Episode VII

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On Thursday, Disney (DIS) released better-than-expected fourth-quarter results. Revenue for the period jumped 7%, while segment operating income advanced 6%. Disney’s quarterly performance was led by accelerated growth in the company’s ‘Consumer Products’ segment (up 14%), though revenue expansion in the firm’s ‘Media Networks’ segment slowed to 1% in the quarter versus a 5% pace for the fiscal year. Segment operating income in the company’s ‘Media Networks’ division was the only segment to experience a decline, though we note that profits at the rest of the firm’s business segments performed incredibly well. Adjusted for the recognition of previously-deferred ESPN affiliate fee revenues (a transitory factor), however, operating income would have advanced in the company’s ‘Media Networks’ segment as well. Disney’s net … Read more

What’s Going on in the Time Warner-CBS Battle?

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A few weeks ago, CBS (click ticker for report: ) and Time Warner Cable (click ticker for report: ) took their disagreement over carriage fees to another level, as both firms’ existing carriage fee agreement expired, effectively blacking out Time Warner subscribers from viewing the network. Since then, we’ve seen really no signs of the companies coming to any sort of agreement. The Federal Communications Commission (FCC) warned on August 9 that, if the two firms didn’t reach an agreement, the government could get involved and force a resolution. Such an event would be an incremental negative to CBS because we doubt the FCC would see a reason why consumers should be forced to pay more for a network they … Read more