Dancing With Mickey

Benj Gallander Let’s face it. If you are reading this article, odds are that you are 50 or over, perhaps even retired. Not every MoneySaver reader fits this demographic, but there are lots of us. Yup, me included. Darn, when did that happen?

Being in this group means that many of the games and dreams that we indulged in as children are now being played by our kids, or more likely, grandkids. Rather than participants we have turned into spectators, doing more cheering than sweating.

So with the help of my lads, aged 13 and 10, it was time to set back the clock and head to Orlando. I was on my way to speak at the informative World MoneyShow (moneyshow.com), an event that is also held in Toronto and Vancouver among other places, and it just seemed like the time was ripe to finally take that family trip we had talked about for years. Universal and Disney were top picks on the agenda, along with escaping one of the toughest Toronto winters in years. Heck, let the snow shovel itself.

So off we went, the 3:45 AM wake-up call deterring none of us so that we could comfortably make our 6:30 AM flight. Even at 4:30 AM, the Toronto airport is a bugbear, with people lining up for all of it: tickets, luggage, customs, more customs, and Tim’s. Eventually indeed, on the tarmac and positioned behind who knows how many planes to leave. Lift off!

The price to get into one of the two Universal theme parks is not cheap to be sure, figure $100 a ticket or so after sorting through the various purchase options. But man, what delightful worlds await, whether it be the Universal Studios side where characters from favourite films and shows await along with rides for all ages, or the Islands of Adventure, with the Wizarding World of Harry Potter. Both lands are fun-filled and kept us easily entertained for two days. Plus, one has to wonder how places that have millions of visitors a year are so clean. That in itself is magical to be sure.

However, this was not merely meant as a fun ride. Part of the purpose of this trip was to get a better handle on whether the parent companies of these entertainment giants were worthy of investments. Comcast (CMCSANasdaq) is a widely diversified outfit. Besides Universal, it owns television stations, business services via the internet, advertising, makes and distributes films, theatre, call centers and more. Currently trading north of $50, it is near an all time record. During the heart of the recession, it traded at less than a quarter of the current level. Revenue is a lovely $65 billion, not quite doubling since 2010 but the debt load is heavy at almost $48 billion. Given the fat profits that the enterprise has been achieving, it is surprising that the debt has not been paid down. That would ultimately help to fatten the bottom line and alleviate risk. Worth noting is that the people at the top are not only richly rewarded, but their pay is lofty enough to enter into the realm of a classic fantasyland. The top four took in about $120 million last year. Holy Jiminy Overpaid Crickets!

The Walt Disney Company (DIS-Nasdaq) is also trading near historical highs, around $80. It traded at teenage $ prices during the recession, so has had a huge move upwards. Plus there has been a dividend to boot. The balance sheet is in better shape than Comcast as the debt is about one-third of the $45 billion revenues. Book value is about $26 although it is a bit lower when the goodwill is stripped out. Insiders own approximately 7 percent of the stock, although they have been heavy sellers during the run-up.

Like their entertainment brethren at CMSCA, the top dogs at DIS appear overcompensated. Number one, Chairman/CEO Robert Iger was paid more than $17 million. That pales in comparison to the additional $55.8 million he received. That leaves less in the till for the lowly shareholders and one senses greed in the Wonderful World of Iger.

Strategically, stocks trading near their peak are of zero interest to me. People who buy into them or hold them are momentum players. While that can work to a degree, at the end of the day it is usually a fool’s game, as holding until perpetuity simply is a losing strategy. Rare is the stock that continues on an upward trek for a long time and not one that I know of has lunged from one summit to another forever. Those individuals who buy much lower and sell on the way up often whine, “Oh, if only I had held on!” But of course, selling is a major part of the investing equation and calculating where to sell when a stock is on a major run is important. High often does not mean higher.

So if you are looking for a great time, by all means head to Orlando and go and play at Universal and then trundle off to Disney World to dance with Mickey. These lands are full of mystery and make believe and thrills and chills. Ideally, it might be worth it to go with kids as they play in their fun-frolicked young worlds, although they are not a necessity. The happiness returns are well worth it. In both cases, action at the theme parks is probably far better than investing in the parent companies. Oh, and you might want to pack some lunch and water, to save a few shekels on the sticky food prices.

Benj Gallander, MBA, Co-editor of "Contra the Heard",

Toronto, ON (416) 354-2458,

gall@pathcom.com