Special Report: Disney’s Mega-Growth and How to Apply it to Your Portfolio

Can you name all of the properties Disney owns?

Some of the biggest to date are Marvel, Pixar, Lucasfilms, ESPN, ABC, Touchstone Pictures, The Muppets, A&E, Lifetime, History, and Vice.

The company that creates kid’s movies like no one else also brings you a selection of sports, history, and political TV, holding some of the top channels included in nearly every cable package. It’s not quite a monopoly, but few would really be surprised to see it reach that point.

The company has grown a lot since the early 1920s, when it began as a two-man operation between Walt and Roy Disney. It took off rapidly after the introduction of the iconic Mickey Mouse and gang, and the sale of the company’s first ever full-length feature, Snow White.

But to date, Disney’s biggest growth has come during the past 11 years under the watch of Robert “Bob” Iger.

Iger joined the Disney team when the company bought ABC in 1995. At the time, Disney was working to expand its reach to wider audiences, and Iger was brought along for the ride.

Ten years later, in October 2005, Iger became the CEO of Walt Disney Co. and it was all uphill from there.

The Man for the Job

Before becoming a part of the world’s biggest media colossus, Iger served as president of American Broadcasting Company for just a year. While this gained him practical experience, the company had a smaller reach and a different focus than Disney.

igerIger had to prove himself worthy of the position of CEO, and as the story goes, he did so right away.

Shortly after taking the position on, Iger is said to have calmed a dispute between Disney and Apple, resulting in ABC TV shows being brought to early Apple streaming, and the eventual purchase of Pixar Animation Studios for $7.4 billion.

Since then, Iger has shown himself to be a major asset to the company.

Under his watch, Disney’s operations have expanded, and its stock price has risen a whopping 253%. As of this writing, it’s going for $106.54 per share. The company’s market cap has climbed to $166.722 billion, placing it in the top 30 of all companies on the market.

In 2009, Iger assisted in the acquisition of Marvel Studios. It cost Disney $4 billion, which the studio more than recouped through box office hits through 2014, according to Business Insider.

The last of Iger’s most famous additions to the Disney brand was his purchase of Lucasfilm Ltd., owner of the rights to the infamous Star Wars and Indiana Jones series.

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More recently, Iger has overseen the inclusion of Disney’s movies and ABC programs added to the Hulu lineup. This is indicative of Iger’s next — and perhaps last — major move with Disney toward digital entertainment.

Disney’s digital revenue from streaming services such as Hulu “is growing at a compelling rate,” as Iger stated in late 2016. More mobile apps for entertainment will carry the Hulu and ESPN brands, and further Disney’s transition into the digital business.

Rumors are also spreading (and being shot down with incredible speed) stating that Disney may be looking to add Netflix to its roster next.

This could be another move with Pixar-levels of growth potential if it comes to fruition. Netflix has already begun collecting awards for its biggest original series, such as House of Cards, Orange is the New Black, and Stranger Things. 

But if such a deal is to go through with Iger at the wheel, it will have to be soon. He’s insisted that he’ll be giving up the role of CEO in June 2018, and is supposedly already looking for a replacement.

It’s been a great 12 years for this massive company, and Iger has created a monument that his successor will have to work hard to keep up and build onto in the future.

But short of wondering if you ought to invest in Disney stock, what can you as an investor take away from this story of broad expansion and booming growth?

When Robert Iger relinquishes his position in 2018, an era in Disney history will end. Iger took the company to new heights, and the way he did it was deceptively simple.

In fact, his methods can be broken down into three main characteristics that Disney creators and everyday investors alike should strive to achieve…

1. Creativity

“The most important quality that the next CEO of the Walt Disney Company must have is the ability to appreciate the value of great creators and the creative process,” Iger is quoted as saying at Vanity Fair’s New Establishment Summit 2016.

Iger knew from the start that creative people made for an innovative team. In a company like Disney, this meant that there were always new ideas coming in, new scripts and characters being created, and this meant the business was always improving.

When looking for a new investment, or even considering an old one, it takes a creative mind to think beyond the most obvious metrics.igerMickey

You can read reports on a company all day long, but unless you can really connect the dots and ask yourself what all the information means, you’re missing out on the bigger picture. A company’s worth isn’t always evident in one news story or another.

Sometimes, it takes looking at the company from different points of view to get the whole picture of a potential investment.

Don’t just read the latest news; find out the story behind the company!

Past performance isn’t necessarily an indicator of future success, but knowing a company’s history can certainly help in determining if it will still be a good stock in the years to come.

2. Passion

Every single “how to invest” site out there will tell you that you can’t just invest to invest. You have to know what you’re making money for, what you’re going to do with that money, and how much money you’ll need to do it.

In short, you need a goal and the drive to reach it.

“[Iger] sits at the top of the most successful entertainment company in the world, but deep down, he’s a person who is never at rest and who is never complacent about success or about being in that position,” says current president of the Disney/ABC Television Group Ben Sherwood.

Anyone can pick a stock at random and hope it goes up. But successful investors have the passion to take a more calculated risk and reap the rewards.

More than that, the best investors in the business don’t settle for a single success.

Take Warren Buffett: did he become one of the richest men in the world and then retire to a private island? No! At age 86, he is still active in the operations of his company, Berkshire Hathaway, which is currently the most expensive stock on the market.

The goal for both Buffett and Iger was never concrete: it was just to improve, and then improve some more.

Now, you wouldn’t be faulted for having a concrete goal such as a new home, a vacation, or an early retirement. But what you absolutely must have to be successful is the passion for whatever your goal may be, and the ability to, as Walt Disney once said, “keep moving forward.”

3. Diversification

This is one every investor should know already, and one Bob Iger has taken very seriously.

Disney wouldn’t be the media behemoth it is today without the wide range of intellectual property it has added to its coffers in the past 11 years. It’s not just a movie maker anymore; it’s a TV, resort, theme park, music, clothing, toy, merchandise, and experience maker too!

Moreover, it makes all of those things using its diverse assets, namely the ones listed above. With so many products under so many brands, it’s easy to see why Disney has such a large influence on the world of pop culture.

For an investor, diversity is important in much the same way.

Of course you know that you want to hold stocks in a number of industries. This lessens the risk that you’ll lose it all if one industry goes under.

Consider, too, diversifying within industries. Don’t just hold oil companies; hold upstream, midstream, and downstream companies. Don’t just buy into the Internet of Things; buy companies creating for home, industrial, and health care technologies.

Every one of them has a different benefit, and will react differently to normal market cycles.

And don’t be afraid to look into a new industry. Iger is quoted as stating that without curiosity, “you don’t try new things, you don’t innovate, you don’t discover new places.”

You may not be writing the next blockbuster kid’s movie, but it’s still important to keep an eye out for new avenues. A stagnant portfolio can be just as fruitless as one too focused on a single investment.

Branch out, know what you want from your investments, and find out exactly how those investments are going to benefit you.


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