This Company Is An Interesting Indirect Way to Play Disney
In mid-February, toy maker Hasbro Inc. (NASDAQ:HAS) announced better than expected toy sales, primarily driven by outperformance in the company’s Star Wars and Frozen toys, brands owned by The Walt Disney Co. (NYSE:DIS).
Sales of Hasbro have increased approximately 15% year over year, at the time of writing, indicating the market’s belief that consumer discretionary stocks like Hasbro have a long runway to continue to grow in the near-term.
I’ve commented in the past on why Disney is a top pick of mine, and the quality of the brands Disney owns really drives the value proposition for me. Hasbro has done a great job of licensing these brands to grow its market share, and should continue its relationship with Disney to continue to drive growth over time, as I really only see these brands continuing to outperform over the long-term.
Hasbro is an excellent example of a company that utilizes partnerships well, and in the toy business, this is a key growth driver investors will be keeping their eyes on.
I enjoy finding indirect ways to gain exposure to a business sector, or trend I believe will continue to thrive over time, and Hasbro happens to be one of my top picks in the consumer disposables sector largely for this reason.
I view the consumable disposables space one which is highly reliant on brands, making this a very difficult area to be in for investors who have trouble with placing a specific value on intangible assets like brands, trademarks, and copyrights.
Canadian toy maker Spin Master Corp. (TSX:TOY) is another great example of a company operating in the same space, but choosing to design and own its brands. Both methodologies work, but ultimately, finding companies with the right brands, in the right markets, is key from an investor standpoint to gauge the long-term prospects of these otherwise cyclical companies.
Invest wisely, my friends.