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Walt Disney (NYSE: DIS) ended the last trading session at $29.54. So far the stock has hit a 52-week low of $26.30 and 52-week high of $35.69. The proprietary Key Risk Ranking for DIS has improved from a 3 KEY moderate relative risk to a 4 KEY Low Relative Risk. This Key Ranking is determined daily and is a measure of the relative risk for an optimal calendar spread trade on this ...(Click the story link or go to http://www.marketintelligencecenter.com for the full story)

According to Reuters, regulators around the world are trying to shore up the banking system. Reuters reports that the Fed is trying to broker a deal for whether Citigroup (C) or Wells Fargo (WFC) will buy Wachovia. Reuters writes that Eli Lilly (LLY) is set to buy Imclone for $6.1 billion.

How To Correct Media Missteps

Nintendo's new DS is more smart than phone, but it can evolve to be both.

Walt Disney (NYSE: DIS) closed yesterday at $29.96. So far the stock has hit a 52-week low of $26.30 and 52-week high of $35.69. The proprietary Key Risk Ranking for DIS has improved from a 3 KEY moderate relative risk to a 4 KEY Low Relative Risk. This Key Ranking is determined daily and is a measure of the relative risk for an optimal calendar spread trade on this underly...(Click the story link or go to http://www.marketintelligencecenter.com for the full story)

Filed under: Press releases, General Electric (GE), Walt Disney (DIS), Newcastle Investment (NCT)

I was sent a press release today concerning World Wrestling Entertainment (NYSE: WWE). It was one that I had missed. WWE, as many may know, has a pretty high dividend yield. Problem is, in this trading environment, some high dividend yields have proven to be predictors of disaster. As an example, were you trading Newcastle Investment (NYSE: NCT) by any chance? Then you know what I mean. For many stocks, high yields are merely a ticket to Dividend-Cut City. Or how about General Electric Company (NYSE: GE)? That company didn't cut its dividend, but management indicates that there won't be a raise in the dividend this year. It's been many, many years since GE refused to raise its quarterly payout. In many sad ways, it could be considered a cut.

Yet, here's something encouraging for investors in WWE. Management at the world's most famous wrestling institution has come out swinging, eager to alleviate the fears of shaken investors in a world bloodied and bruised by the financial crisis (hey, maybe that could be a new wrestling character, Financial Crisis, and his finishing move could be the Mark-to-Market). According to the press release, WWE intends on keeping its current quarterly payout for the long term. The very high yield of 9%, as far as execs are concerned, is doable.

What are income investors to make of this? Well, in my opinion, long-term investors might do well with WWE stock. Consider that we are not dealing with a financial company. Like GE, WWE didn't say it intends to raise the payout. But WWE has increased the dividend quite a bit since it first initiated the shareholder-friendly initiative. In this environment, the ability to keep a high yield is something that could be valuable.

However, WWE has had an issue with cash flow as of late (I covered it in a piece about the company's earnings back in August). WWE, as I had mentioned, is working hard to establish itself in the movie business, so cash flow is being utilized to do this. Granted, the movie business is risky, but I think it could pay dividends (literally and figuratively) down the line. Another thing income investors need to consider is that Vince McMahon and his family obviously want to be paid a lot in terms of dividends. It's quite possible that they will maintain their motivation to do everything in their power to protect the yield. Some execs don't care about quarterly payouts. As an example of this irritating phenomenon, I think Bob Iger of Disney (NYSE: DIS) could care less about the income equation of his company. Although I am not in McMahon's head, I think this may be a priority of his going forward. Since his stock hasn't panned out in terms of rampant capital appreciation, it looks like he wants to use a dividend strategy to entice long-term investors (as well as himself).

In summation, I think WWE might indeed be a good long-term dividend play. I still think that CEO Linda McMahon needs to do what she can to improve the current cash-flow imbalance. She needs to step up her game on this count. No one wants to see a challenged free-cash-flow scenario in the face of a high dividend yield, financial business or not. But I have to say, I own shares of Disney, and whenever I look at WWE's dividend yield, I do wonder sometimes if I'm in the wrong media stock. By the way, I would consider waiting for a bit of a pullback on WWE's shares before entering, but you can make the final decision on that count after much due diligence.

Disclosure: I own Disney, GE, and Newcastle Investment; positions can change at any time.

 

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Filed under: Press releases, General Electric (GE), Walt Disney (DIS), Newcastle Investment (NCT)

I was sent a press release today concerning World Wrestling Entertainment (NYSE: WWE). It was one that I had missed. WWE, as many may know, has a pretty high dividend yield. Problem is, in this trading environment, some high dividend yields have proven to be predictors of disaster. As an example, were you trading Newcastle Investment (NYSE: NCT) by any chance? Then you know what I mean. For many stocks, high yields are merely a ticket to Dividend-Cut City. Or how about General Electric Company (NYSE: GE)? That company didn't cut its dividend, but management indicates that there won't be a raise in the dividend this year. It's been many, many years since GE refused to raise its quarterly payout. In many sad ways, it could be considered a cut.

Yet, here's something encouraging for investors in WWE. Management at the world's most famous wrestling institution has come out swinging, eager to alleviate the fears of shaken investors in a world bloodied and bruised by the financial crisis (hey, maybe that could be a new wrestling character, Financial Crisis, and his finishing move could be the Mark-to-Market). According to the press release, WWE intends on keeping its current quarterly payout for the long term. The very high yield of 9%, as far as execs are concerned, is doable.

What are income investors to make of this? Well, in my opinion, long-term investors might do well with WWE stock. Consider that we are not dealing with a financial company. Like GE, WWE didn't say it intends to raise the payout. But WWE has increased the dividend quite a bit since it first initiated the shareholder-friendly initiative. In this environment, the ability to keep a high yield is something that could be valuable.

Continue reading World Wrestling Entertainment: Long-term play for dividend fans?

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Filed under: Apple Inc (AAPL), Walt Disney (DIS), Viacom (VIA), Electronic Arts (ERTS), Activision Inc (ATVI), Technology

As an Activision Blizzard (NASDAQ: ATVI) shareholder, I'm extremely gratified by the unqualified success of the Guitar Hero franchise. However, I'm none too happy about statements made by Warner Music Group (NYSE: WMG) CEO Edgar Bronfman Jr. who believes that Activision Blizzard should be paying more to license the songs. When I first heard about that, I admit, I became a bit worried. After all, if the publisher has to pony up a higher amount of cash to the music industry, then there could be pressure on the stock.

Well, I'm glad I caught a blog post by Eliot Van Buskirk for Wired over at Portfolio.com. Looks like Activision Blizzard CEO Robert Kotick isn't taking too kindly to those in the music industry who suggest his company needs to share a higher percentage of the spoils. He basically told Bronfman Jr. to chill out, suggesting that the impact of his software platform on music sales for artists that are contained within it almost argues that the publisher shouldn't pay a dime to the music industry.

The shareholder in me says "right on, Bob!" In this digital age, the music industry needs all the help it can get in promoting its artist roster. Gone are the days when consumers opened their wallets for physical CDs. That aspect of the music industry is dying in favor of the iTunes model that powers Apple (NASDAQ: AAPL) and its iPod empire. Therefore, I agree with Buskirk's assertion that the boat shouldn't be rocked here. Music companies should just accept the licensing structure as it exists, look at it as a loss leader if they feel that's what it is, and just be satisfied with the ancillary promotion they receive.

Yet, I'd be less than truthful if I said I didn't understand where Bronfman Jr. was coming from. Indeed, I am a media-sector kind of guy and I do love the idea that content libraries can be leveraged to drive shareholder value. Bronfman Jr. is simply trying to get the most money that he can for his content. He wants to ensure that it is perceived as valuable. After all, if games such as Guitar Hero and Rock Band, the latter of which is produced by Viacom (NYSE: VIA) and distributed by Electronic Arts (NASDAQ: ERTS), becoming increasingly popular, then Warner Music Group needs to act on behalf of its shareholders' best interests.

It's like Disney (NYSE: DIS). Disney has gotten into battles before with cable companies over its content, demanding higher fees per subscriber for the right to place its cable channels on a given system's lineup. I am a shareholder of Disney, and although I did see both sides in that case as well, I obviously appreciated that Disney was standing up for me.

At the end of the day, though, the music industry should back off. I'm obviously biased, but I think Warner Music Group and other businesses dependent on the marketing of tunes to the youthful demographics need to allow Activision Blizzard and Viacom to profit as handsomely as possible so that they will continue to pump money into each new iteration of its games and make them as technically advanced as conceivable. It's not like Bronfman Jr. has to shoulder the development costs. Then again, he'd probably argue that he was in fact doing that by essentially giving away his content for less than what he believes it's worth.

Value is in the eye of the beholder, I guess. I hope this doesn't turn into an all-out war. But I'm glad Activision Blizzard's CEO is injecting some cool rhetoric into the skirmish on behalf of shareholders. Hey, Warner Music Group's stock hasn't been as strong as Activision Blizzard's stock the last few years, so I'm sure there's a little bit of ego-clashing going on here as well. At any rate, this should be an interesting one to watch.

Disclosure: I own Activision Blizzard and Disney; positions can change at any time.

 

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Filed under: Apple Inc (AAPL), Walt Disney (DIS), Viacom (VIA), Electronic Arts (ERTS), Activision Inc (ATVI), Technology

As an Activision Blizzard (NASDAQ: ATVI) shareholder, I'm extremely gratified by the unqualified success of the Guitar Hero franchise. However, I'm none too happy about statements made by Warner Music Group (NYSE: WMG) CEO Edgar Bronfman Jr. who believes that Activision Blizzard should be paying more to license the songs. When I first heard about that, I admit, I became a bit worried. After all, if the publisher has to pony up a higher amount of cash to the music industry, then there could be pressure on the stock.

Well, I'm glad I caught a blog post by Eliot Van Buskirk for Wired over at Portfolio.com. Looks like Activision Blizzard CEO Robert Kotick isn't taking too kindly to those in the music industry who suggest his company needs to share a higher percentage of the spoils. He basically told Bronfman Jr. to chill out, suggesting that the impact of his software platform on music sales for artists that are contained within it almost argues that the publisher shouldn't pay a dime to the music industry.

The shareholder in me says "right on, Bob!" In this digital age, the music industry needs all the help it can get in promoting its artist roster. Gone are the days when consumers opened their wallets for physical CDs. That aspect of the music industry is dying in favor of the iTunes model that powers Apple (NASDAQ: AAPL) and its iPod empire. Therefore, I agree with Buskirk's assertion that the boat shouldn't be rocked here. Music companies should just accept the licensing structure as it exists, look at it as a loss leader if they feel that's what it is, and just be satisfied with the ancillary promotion they receive.

Continue reading Activision Blizzard is no hero to Warner Music Group

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Schaeffer's Laura Houser takes a look at activity on the Street after the market close

Schaeffer's Laura Houser takes a look at activity on the Street ahead of the market open

Strategy Lab Panel: Robert Walberg, Kelly Wright, Vad Yazvinski, Ken Kam, John Resse and Ron Prichard. We review each of the strategies and the specific ways in which the strategies work as well as stock picks and pans. From Screening on a quantitative basis to contrarian investing strategies and back, this episode has a great deal of ideas that will help you profit. We yammer about Marijuana legalization and the Democrats looking strong. Then, we explore how that is going to effect your portfolio. Good clean fun...

Schaeffer's Colleen King takes a look at activity on the Street ahead of the market open

Walt Disney Company  (Public, NYSE:DIS) has been getting plenty of attention lately thanks to Hanna Montana acting a tad like ol' Britney Spears (she could have shaved her head). But there's plenty to look forward to and a ton is riding on Disney's earnings report set for Tuesday.

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