The stock prices over the last few months, with the exemption of Amazon's, I've found wer pretty easy to understand. By understand I mean I can see the logic behind the stock price moves of many companies after looking at the news and earnings. However, Disney's large drop after the market close is very confusing to me. Dropping close to 6% after posting an earnings beat and YoY increases in EVERY segment. I know the claim is slowing business at international theme parks possibly related to Forex and downgraded outlook on cable but what the hay? The cable business makes up a very small portion of Disney's portfolio the cited currency headwinds by many analysts were already a known issue before earnings were released. I'm confounded by the market reaction based on numerous positives surrounding Disney. In the movie group, the new sequels which are announced; highlights in the their earnings report; and the swap from a yearly to expected semi-annual dividend are all positives. These should weigh favorably for the stock. But the opposite is happening. Two small blips are causing an overreaction: the foreign concerns and decreasing cable outlook. Very confused but in a good way. I believe the Street is wrong on this one. Disney is first on my list to buy and believe that a year from now, those who sold Disney are going to kick themselves. My opinion, others may have seen something I missed.
It's the old theory of buy on the rumor, sell on the news. Here is just one explanation. http://www.dummies.com/how-to/content/how-to-buy-stocks-on-the-rumor-sell-on-the-news.html HTH. YMMV.
As the best performing stock on the Dow (if I'm not mistaken) this year it was always going to be under pressure with people taking money off the table. I've seen a few different rationales for the sell off (e.g. weakness in the theme park revenue in Paris - even though that was partly down to currency) and general assumptions of revenue not meeting all metrics. But a lot of the good news (Pixar, Marvel, Star Wars etc) has been well factored into the share price. In fact, if Star Wars doesn't do an "Avatar" or a "Titanic" in terms of box office (and instead does an "Avengers") we could see a bit more weakness - but that's a while out.
Good point Onionman. Up until yesterday I think they were the best performing stock on the DOW. You're explanation also makes a lot of sense. People are taking profits while they can.
Agreed. These short term dips you see in good companies are often great buying opportunities - as long as the dip was an overreaction of temporary excessive selling by profit takers and short sellers to something minor - and not based upon something major (declining company fundamentals, accounting fraud, etc).
Also remember we are in August, which is the time when a lot of funds managers take vacations and will take money out of their winners in order to lock in ´wins´. They will come back in a month and buy back in if the price is the same or lower. it is almost a self-fulfilling prophecy now.. Because so many people take money out of their winners in August, people are basically forced to take money out. Someone should do some reseach, but my guess would be that best 5 Dow stock from January to July, almost always have horrible Augusts ( at least for the past 20 years).
I'm looking for an entry point to add $DIS to the portfolio. Looks interesting, maybe before the weekend.
I think anything below 110 is fine to get in, just looking at the 1 year chart. This has still be a great win for people who invested this time last year. I don´t follow the company enough to say more than that. But just based on history, I would think there is a big bounceback coming the end of August or early Sept and it will regain what i lost last week.
Very interesting point. I'll look into this analysis (if I'm skilled enough). It was official on Friday, bought shares of Disney. I'm already feeling the contrarian juices flowing. Perhaps time to buy a put on Amazon?? (kidding).
