The Force Is Strong With Star Wars Stocks

I gave my thoughts to Patrick Sanders, writing for US News and World Reports, on stocks that stand to benefit from the latest Star Wars movie installment. Here is an excerpt:

The Walt Disney Co. (ticker: DIS). For its $4 billion investment to buy Lucasfilms. Disney is unquestionably the company with the biggest stake in the new Star Wars films. You can expect “Star Wars: Episode VII – The Force Awakens” to be the biggest movie of the Christmas season – the other six films collected a combined $4.4 billion in box office revenue – and Disney will primed to make this the biggest “Star Wars” yet…

“Disney has a lot of momentum right now, and it is one of the few large companies that really seems to be doing well. And this is before the release of the Star Wars installment, which will almost certainly be one of the biggest movies in history by box office sales and merchandise sales,” says Charles Sizemore, founder of Dallas-based Sizemore Capital Management, an investment advisory firm. “But the thing to remember about Disney is that ESPN is its main cash cow. Disney’s media networks make up about 60 percent of company profits, and this is completely dominated by ESPN. With TV slowly moving to an unbundled a la carte model, Disney’s long-term future here is uncertain.”

Hasbro Inc. (HAS). Unlike Mattel stock, Hasbro has been a Wall Street star in 2015, up more than 45 percent and continuing to outperform its 50- and 200-day moving averages. HAS stock has benefited from year-over-year revenue growth for five straight quarters, and the stock still appears to have room to run higher.

Hasbro is licensed to create and sell hundreds of Star Wars-branded games, action figures, electronic toys and puzzles. If you are shopping for Star Wars toys this holiday season, you’ll likely consider a Hasbro product at some point.

“Hasbro’s brands, particularly its Transformers and Marvel superhero franchises, have been well-suited to TV and movie success. And with the big ramp-up of publicity with the upcoming Star Wars movie, demand looks to be strong for probably several years to come,” Sizemore says.

 

You can read Patrick’s full article here.

Disclosure: None.

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