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Why Now Is a Good Time to Play Disney


The company has beaten expectations three straight quarters.

Weather permitting, I've got three soccer games, a birthday party, and a pile of leaves in my backyard the size of small Volkswagon awaiting me this weekend.

Asian stocks ended mixed. The Hang Seng was up 0.7% but the Nikkei finished down 0.35%. European stocks, however, were up in early trading. And here in the US we're currently trading higher.

Here's what I'm focused on besides the closing bell, the impending weekend, and the large pepperoni pizza my wife assures me will be on the table when I get home:

Disney (DIS):
Mickey Mouse & Co. were out with the company's fourth-quarter results. Disney put up $0.46 excluding items, which was a nickel better than expectations.

Some quick thoughts:

1. Disney's stock has certainly been caught in a rut in recent years, but as of right now, I think it's got a solid shot of hitting a 52-week high.

2. Remember, it's been advertising the heck out of its parks, it continues to have businesses with the potential to grow like vines in the years ahead (particularly theme parks and movies), and on the chance you're keeping score, it's now beaten Street expectations three quarters straight, which is a pretty solid record.

That said, it may be a good time to play here.

Nordtstrom (JWN):
The retailer released its third quarter.

It put up $0.38, which seemed to be a penny shy of expectations. However, it did indicate it's looking for $1.83 to $1.88 for the year, which is a nice bump up from what it had been looking for.

My feel:

1. I don't think it was a terrible quarter, and also on a positive note, I thought that management's outlook was good news. But why should I buy or belly up?

2. The holiday season is upon us, true, but there's also crazy competition going on with discounters and mall-based department stores and a super-fickle consumer that's still reluctant to drop coin. And with regard specifically to Nordstrom, it's trading at a fair (roughly) 18.4 times the upper-end of the company's outlook. I'm passing on this one.
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No positions in stocks mentioned.

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