An Underrated (but Important) Reason to Buy Disney Stock Now

Uh-oh. Walt Disney is killing part of the Star Wars franchise it acquired in October for $4 billion. The good news? Like Obi-Wan Kenobi, the dead will rise soon enough, and in perhaps a more powerful form.

Specifically, Disney has closed 31-year-old game-development division LucasArts and laid off some 200 employees who worked there, The Wall Street Journal reports. New Star Wars universe games -- presuming any are under consideration -- will be published elsewhere.

It's a good move, says Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova in the following interview with The Motley Fool's Erin Miller. Researcher NPD put LucasArts' revenue at just $55 million last year, down sharply from $175 million in 2006.


What's more, Tim says, Disney is the world's largest brand licensor and as such could extract good terms from the likes of Electronic Arts and Activision Blizzard , both of which have long, successful histories with developing games around licensed brands. The possibility of such a deal may help explain why Disney stock reached another new high this week.

Are you more bullish on Disney's prospects after seeing this news? What about Activision and EA? Please watch this short video to get Tim's full take, and then leave a comment to let us know whether you'd buy or sell Disney stock now, and why.

It's easy to forget that Walt Disney is more than just the House of Mouse. True, Disney amusement parks around the world hosted more than 121 million guests in 2011. But from its vast catalog of characters to its monster collection of media networks, much of Disney's allure for investors lies in its diversity, and The Motley Fool's premium research report lays out the case for investing in Disney today. This report includes the key items investors must watch as well as the opportunities and threats the company faces going forward. So don't miss out -- simply click here now to claim your copy today.

The article An Underrated (but Important) Reason to Buy Disney Stock Now originally appeared on Fool.com.

Fool contributor Tim Beyers is a member of the  Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He and Erin Miller both owned shares of Walt Disney at the time of publication. Check out Tim's Web home and portfolio holdings, or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.The Motley Fool recommends and owns shares of Activision Blizzard and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


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mltiell

I own Disney and was frustrated for years at the stagnation of the stock. Now that has turned around but dividends are still very disappointing. I would like to see Disney's recent and hopefully future success translated into a meaningful dividend return in the future.

April 11 2013 at 8:32 AM Report abuse rate up rate down Reply
HELLO MARIO

I own a little over 1 thousand shares of Disney. It just hit a new high. I am skeptical about buying at this price. I will gamble that the stock will correct itself before the year is out like it has done in the past. I am bullish on Diswney they have some very smart people working for them. I am not happy with the bonuses they give themselves. I feel they deserve something but what they get is excessive.

April 10 2013 at 5:45 PM Report abuse rate up rate down Reply