A Nostalgia Driven Trip Down the Disney Lane
Before we start, I need to talk about something. If you are a dedicated reader, you know that I like to put a little quote into the subheadings of these articles. The thing that pops up right below the title. Recently, I’ve been on a poetry trip driven by my really good English teacher, Mr. Fossett, who has exposed me to so much poetry recently. Anyway, we were doing a lot of Blake recently, and I quite like him and his vibe. A few minutes ago, I found “Auguries of Innocence.” Usually, I find poetry like this to be a bit tedious and repetitive, but I don’t know, I thought it was overpowering. The subheading for tonight is from “Auguries of Innocence,” and I recommend that you check that bih out. But please keep in mind that I don’t really know what good or bad poetry is still, so if you are a pro in late 18th or early 19th-century poetry, don’t judge me too harshly.
Also, if you are a dedicated reader, you know that I used to be a big Disney guy. To make a long story short, when I first started this portfolio, all the way back in the big 2019, when I was in seventh grade, Disney was the first stock that I picked all on my own, without any help from my fabled grandfather (Grandpa Joe). I bought it in the mid $120-s, and the price nearly immediately shot up because of Covid. Honestly, I didn’t really know what I was doing too much, so I held all the way up to like $180, and I held all the way back down. Then, I started buying once the price fell below $100. Then, I really started buying once the price got below like $80. In fact, I started telling various family members, namely my grandmother to start buying.
This was in about Fall of 2023, so it’s been a minute, but the price has increased since then, and I have made my grandmother a little chedda. Anyway, I became so used to seeing Disney in my portfolio, and honestly, I started justifying my purchase/hold so much, that I was basically brainwashing myself. I never really stopped to think “Wait, do I actually want to hold this stock? Does this fit in my portfolio as the type of company I want?” The answer is, and was, no. So, I sold last quarter, and bought a bunch of Ferrari stock, GigaCloud, and ASML.
Now, I will NOT do that thing that I have been known to do from time to time, where I sell a stock and then go super crazy about hating on it. Admittedly, that bias is a fault that really crushes my objectivity. Instead, we will review Disney earnings tonight for old times’ sake, with impartiality and rational analysis as the priority.
Operating income, pure profit, from the streaming division of Disney and Hulu made about $300 million in this most recent quarter, compared to the $200 million loss from a year earlier, which is pretty good growth. Disney did lose 700,000 subscribers though, and while that was less than the 1 million expected in losses, 700,000 is not chump change.
That said, the company jacked up prices a ton, so I don’t hate the subscriber loss. I prefer Disney as a company making a ton of money on their most dedicated fans, rather than a Netflix circa 2022 clone, trying to get as many subscribers as possible.
I also really like the 15% uptick in ad revenue from ESPN. Frankly, the entire ESPN division has been a money pit for years, so anything that bucks that trend is good news, espescially with the new, heliocentric model that Pitaro has gone hard on.
The box office was obviously great from products like Moana 2 driving that segment up quite a bit. Parks stayed completely flat, which is annoying but expected. Disney is not as reliant on that segment as it used to be, so I do not despise this. Also, Helene and Milton both did some damage, so like I said, expected. I have seen a ton of headlines freaking out about Disney not being able to attract people to their parks, but I just do not care right now. The future of the company lies within media, which will then propel the parks, not the other way around. Frankly, I think people are a bit behind the curve on the relevance of the parks/cruise hold. They are money-makers, and they are continuing to make money, even at the truly wild prices that D’Amaro has raised everything to.
Finally, Disney is bundling their streaming together, great!
I give Disney a 6.5/10 on this quarter. I would not call it absolutely spectacular, but I still see good strength on the whole, and I think Disney is more of a hold than anything. Let me put it this way, I’m not telling my grandmother (shout out BB), to sell.
