Despite the company posting good-to-great quarterly earnings over the last year, however, the market has sent its stock tumbling 11.6% since it set its all-time high on Aug. 17, 2015 due to much-ballyhooed concerns about "cord-cutting." The market's shortsighted underestimation of the Mouse's ability to successfully navigate the current changing consumer media market offers a buying opportunity for long-term investors.
Here are three top reasons Disney stock is a buy:
1. Studio entertainment is unstoppable
The company's flagship movie brand Disney and its three brands astutely picked up through acquisitions -- superhero-focused Marvel, animation titan Pixar, and Star Wars-creator Lucasfilms -- are firing on all cylinders.
For the first nine months of fiscal 2016, ended July 2, studio entertainment's year-over-year revenue jumped 37% to $7.63 billion, while its operating income soared 61% to $2.32 billion. These numbers account for 18% and 18.5%, respectively, of Disney's total revenue and segment operating income.
The company kicked off its fiscal year with the release of the phenomenally successful Star Wars: The Force Awakens in mid-December. The film took in nearly $2.1 billion at the box office, making it the third-highest-grossing movie worldwide of all time, behind only 2009's Avatar and 1997's Titanic. Disney continued to churn out hit after hit in calendar year 2016.
The House of Mouse's domination of the world's silver screens should continue, thanks to a powerful slate of movies scheduled for release over the next few years. Notably, the Star Wars' stand-alone flick, Rogue One, debuts domestically on Dec. 16.
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