"An improving economy provides lots of leverage for theme-park, media, and movie operations at Walt Disney (NYSE: DIS)," says Chuck Carlson in his The DRIP Investor.
"The firm is expanding its operations with the acquisition of Marvel Entertainment. Marvel has a library of roughly 5,000 characters, including Spider-Man, Iron Man, X-Men, and The Incredible Hulk.
"Adding these characters to Disney’s already packed stable of well-known characters increases opportunities for a variety of synergies, including new movies and park attractions built around Marvel’s characters. The deal is expected to close by the end of the year.
"Virtually all of the company’s operations have been impacted by the weak economy. However, even modest improvement in the economy should be good news for most of its properties, especially theme parks.
"Long term, theme park and resort expansion — the company is building a resort in Hawaii and adding to its fleet of cruise ships —as well as improved movie operations with the Marvel deal and continued strength from the ESPN brand should drive above-average earnings growth.
"The current valuation is providing a good opportunity to buy this stock. The stock is an attractive buy below $30."
