Grade 6 - 8 Winner
Student: Isabelle Broz
Teacher: Brooke Townsend
School: St. Luke School
Location: Palm Springs, FL
Question
Many different things make the price of a stock go up or down. For example; the company hires a new boss, the company sells a defective product which hurts their reputation, along with many national or global events. Pick a real world company from the stock market and describe one thing that could increase the price of the stock and one thing that could decrease the price. Using your research explain if you think the company is a good investment given what you know about current events and the global economy.
Essay
Disney, A Company for the Future
The Walt Disney Company is the largest entertainment conglomerate in the world, bringing in 38.1 billion in income each year for the last three years. It was founded in 1923 and has been in existence for more than 85 years and employs over 150,000 people. It is considered by the New York Stock Exchange to be a blue chip stock, a stock in a corporation with a national reputation for quality, reliability, and the ability to operate profitably in good times and bad. It is a company known for brining imaginations to life with outstanding service.
However, no stock is unaffected by changes. If the present Chief Executive Officer (CEO), Mr. Robert Iger, were to leave and be replaced by someone who had very different visions for the future, Disney’s economic future could be hurt. Presently, Mr. Iger’s vision is to generate the best creative content possible, foster innovation and technology, build upon Disney’s rich storytelling, and strive to be the best in customer service. If a new CEO was to have a vision based strictly on present income and not build for the future in innovation and technology, Disney would not be the leaders in robotics and movie graphics. The quality of the parks world-wide and movies would not be the leaders in entertainment. Innovation and leadership would be hurt in a few short years. Technology in these areas grows rapidly. With this change in vision would come less belief in the company and lower stock prices.
Oppositely, if the present CEO was to continue with the vision for innovation, creativity, and building for the future, Disney could remain stable. If and when the world economy improves and unemployment decreases, family incomes will increase. Greater incomes will result in families having more money for recreation. Families will be more willing to spend more at Disney resorts either by making trips or spending longer periods at the parks. Further, with greater incomes families will increase spending at the movies. All of these things would increase Disney’s profits and stock value.
Presently, despite Disney’s size and profit, its stock price has fluctuated greatly. According to Yahoo Finance, the price of Disney’s stock performed unevenly over the course of April 2009 to present, ranging from $17.85 to $36.88 per share. This makes Disney stock a risky short-term bet. However, I feel Disney is a very good long term stock investment. As said, Disney is invested in the future and is leading and growing in technology. The company shows us this in its great range in movies for all ages with amazing cinematic technology. The list of movies on the Disney website has movies listed to come out in 2014. They are planning for the future. Further, Disney parks, hotels and resorts, and cruises continue to grow world-wide. Disney has present and real plans for resorts in Hawaii, Hong Kong, and expansions at existing parks. The planning department of Disney never stops. I believe if Disney continues to be led by innovations with visions of the future, Disney Companies will continue to be preferred destinations world-wide. With this continued improvement and expansion stock prices will rise. Disney is a good investment for the future.