Investopedia: Disney Has A Stable Of Horses To Ride

While the quality of global entertainment and media giant Walt Disney (NYSE:DIS) is generally taken as a given, the company has always been a little more erratic in terms of margins, cash flows and returns on capital than most companies of its size and reputation. These variances are largely a byproduct of the nature of the business (particularly hit movies), but they can still create opportunities for investors. Disney seldom gets very cheap, and the company has multiple levers to improve results over the coming years. But investors should keep their eyes open for a chance to pick up shares should the stock stumble on transitory bad news.

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Investopedia: Harley-Davidson Looking A Little Over-Revved

Nobody knows what the "new normal" for this economy is going to look like. Poor employment and wage growth, and nervous banks are keeping a limit on big-ticket consumer spending, but it seems reasonable to assume that the average consumer's taste for leisure has not vanished for good. The trouble, though, is that some stocks like Harley-Davidson (NYSE:HOG) seem to be pricing in a quicker return to normal than the economy seems capable of delivering. (To learn more about the effect earnings will have on stock prices, check out Earnings: Quality Means Everything.)

A Strong Rebound in the Second Quarter  
Certainly Harley-Davidson showed some signs of life in this latest quarter. Revenue jumped 18% as the company shipped 13% more bikes and realized almost 7% better pricing. This growth was underpinned by better than 7% growth in domestic sales, while international sales and shipments were relatively softer. 


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Harley-Davidson Looking A Little Over-Revved (HOG, THO, WGO, PII, CCL, RCL, MTN, HMC)

Investopedia: Disney And The Rich Getting Richer

Amidst all the tumult over oil prices, new highs in copper, soaring grain and a global industrial recovery, a giant has quietly gone about its business of hoovering out more dollars from people's wallets. As consumers are reopening their wallets, and consumer goods companies rush to convince them to spend on their products, Disney (NYSE:DIS) is delivering some impressive results. 

A Good Open to the Year 

For its fiscal first quarter, Disney reported that revenue had risen 10% to nearly $11 billion. Within that figure, the TV business saw 11% growth, theme parks and resorts grew 8%, and creative content (movies, etc.) grew 6% as 24% growth in license revenue offset flattish movie results. Drilling even deeper, ESPN ads were up a startling 34% as this leading cable network continues to serve an apparently bottomless appetite for sports. While traffic at the theme parks and resorts seemed a bit soft, the spending per attendant was quite strong and bookings for the second quarter seemed alright. (For related reading, check out 4 Non-Cyclical Growth Stocks Increasing Dividends.)

Going down the line, it's hard to complain about the company's profitability. Overall earnings before interest and taxes jumped 39%, with the TV business doing even better (up 47%). All in all, Disney improved its operating margin by almost four full points, a pretty remarkable result.

The Road Ahead 

Looking out into 2011, it would seem that Disney has the wind at its back. The company's ABC network is not really lighting it up in terms of ratings, but Disney seems to have found a workable solution for the time being in cutting production costs. Moreover, ratings success is fickle and unpredictable; it was not that long ago that CBS (NYSE:CBS) was a basket case. In the meantime, ESPN and the Disney Channel are crown jewels that draw millions of viewers every night - though some may be surprised to know that NBC Universal's (co-owned by Comcast (Nasdaq:CMCSA) and General Electric (NYSE:GE)) USA Network is actually the number one cable network. 

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