Disney (DIS) - a growth stock?

[HenryTo]

From the Motley Fool: http://www.fool.com/News/mft/2005/mft05010319.htm

Disney's Global Magic
By Steven Mallas
January 3, 2005

It's a new year. Aside from the ritual of making resolutions, a fresh calendar ushers in a hopeful spirit for better times. I, for one, am optimistic that 2005 will be a better year for one of my holdings, Disney (NYSE: DIS).

In particular, I'm keeping my fingers crossed that a new global marketing initiative that the company announced last week will spur the theme-park operating segment. You can read all the details in the supplied link, but I'll go over some highlights.

The powers that be at the Magic Kingdom are tagging one part of the campaign with the evocative phrase "Happiest Celebration on Earth" (remember, we're talking global here, not just in Florida and California). The celebration marks the 50th anniversary of Disneyland's opening. Another advertising spot is christened "Coming Home"; the objective here is to get people who've been to the parks at one or more points in their lives to come back and relive some nostalgic moments… while spending a bunch of discretionary capital, of course.

I want this campaign to succeed and bring in as many park patrons as possible. Besides television networks such as ABC and Viacom's (NYSE: VIA) CBS, high-profile Internet destinations including Yahoo! (Nasdaq: YHOO), Microsoft's (Nasdaq: MSFT) MSN, and Google (Nasdaq: GOOG) will help spread the pixie dust.

Of particular interest to me was the mention of the opening of the new theme park, Hong Kong Disneyland. It's good to see that the developing investment is being given an opportunity to bear some fruit, although it won't open till September. As longtime Disney observer Rick Munarriz stated in an analysis of the last earnings report, the stock seems to be headed for a rebound. I read with slack-jawed marvel when he rhetorically inquired, "Is Disney the next great growth stock?" It then occurred to me that Disney's share price was slowly but steadily creeping back to my personal cost basis on the stock. And let me tell you, it took a lot of averaging buys to get me back to this point, as I had the bad luck to initiate my position back in summer of 1998.

Disney's stock might be heading in an upward trajectory, but it could just as easily falter; I've been through transient run-ups before. This time feels different, though. We have the global campaign and the anniversary asset (anniversaries are always great marketing tools), as well as the new Hong Kong destination, but I'm also looking for the divestiture of the Disney retail chain and its subsequent conversion to a royalty model to pay nice dividends in the coming year. Perhaps consumer products will finally add some real value to the bottom line.

I'm a long-term investor in Disney, so I'm willing to wait this one out for years. It's been rough going, but now that the dividend has finally been raised after remaining in a steady state for too many years, the new year might indeed be kind to the Mouse and its stakeholder charges.

More information on recent events concerning the Walt Disney conglomerate:

A Disney Year
The Mouse Cleans House
Disney's Brilliant Hike
Fool contributor Steven Mallas owns shares of Disney

[HenryTo]

Finally - a successor has been named! And Andy Kessler sure has a lot to say about Mr. Eisner in his review of the book, "DisneyWar."

http://andykessler.com/wsj_disneywar_book_review.html

------------------------------------------------------------------------

LOS ANGELES - The Walt Disney Co. said Sunday its president, Robert Iger, will succeed Michael Eisner as chief executive after another top contender for the job dropped out of the running. The company said Iger was unanimously elected by the board and will take charge Sept. 30.

Eisner will step down on that day, a year earlier than he had previously announced, the company said.


"Bob is an experienced, talented and visionary leader who has made crucial and substantial contributions toward Disney's strong performance," Disney board chairman George Mitchell said in a statement. "On behalf of the entire Board, I want to express how excited we are at the prospect of Bob leading this extraordinary company and talented management team to new levels of financial and creative success in the years ahead."


In a letter to the board, Eisner praised the decision and said he will not seek a nomination for another term on the board when his current term expires next year. Eisner also said he will not seek the board chairmanship after Mitchell retires.


Mitchell said the board chose Iger after a "lengthy, thorough and professional selection process, comparing both internal and external candidates against our criteria for CEO."


EBay Inc. CEO Meg Whitman, who was competing with Iger for the CEO slot, withdrew her application on Friday after interviewing with the Disney board earlier in the week, spokesman Henry Gomez said Sunday.


"She decided to stay at eBay," Gomez said. "After considering it during the week, she decided she wanted to stay at eBay."


Iger, 54, who also serves as chief operating officer, had been considered a front-runner for the post. He was president of Capital Cities/ABC when Disney bought the company in 1995, and went on to become president of the ABC Group and head of Walt Disney International. He was named president in 2000.


Eisner, who has been CEO since 1984, announced in September he would retire after his contract expires next year and had backed Iger as his successor. Disney officials, meanwhile, had said they planned to choose Eisner's replacement by June and that Iger, along with candidates from outside the company, were being considered.


With the announcement, the board was expected to turn its attention to the search for a chairman. Mitchell, who will turn the board's mandatory retirement age of 72 next year, has said he will not stand for re-election at the 2006 annual meeting.


Disney's board first split the roles last year after shareholders delivered a stinging vote of no confidence in Eisner, who then held both titles. Shareholders withheld 45 percent of their votes for his re-election to the board, a move that prompted the board to strip him of his chairmanship.


The decision Sunday came despite questions about the fairness of the succession process by corporate governance critics and dissident ex-board members Roy E. Disney and Stanley Gold, who sparked the shareholder revolt and lobbied unsuccessfully for Eisner's ouster last year.