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By admin | July 25, 2008
Despite a 283-point drop in the Dow, $300 billion is going to the Federal Housing Administration to help bail out struggling homeowners and more importantly gas prices continue to fall and fall hard, he said. That's why he's looking for stocks that will benefit from falling fuel prices. According to Cramer, that stock is Walt Disney. Despite being beaten up by the market and analysts over fears of rising airfares, Cramer said he's turning negatives into positives by looking closer at Disney's business. While Cramer agreed that airfares are rising, he pointed to a recent study which stated that auto traffic to Disney World has been steadily increasing, not decreasing. “The analysts are only counting airplanes,” he said. In addition, room rates around Disney World have been falling, with 75% of rooms now being classified as moderate to value in price. Furthermore, Cramer said the weak U.S. dollar makes traveling to Disney World cheaper for the rest of the world. He likes Disney's other businesses such as ESPN, a premium cable property that is doing exceptionally well. He called the analysts “way behind the curve” in their estimates for the stock. “Disney is all about franchises,” said Cramer. While Disney World may be experiencing a decline in attendance, Disney is working on new ones like Wall-E, High School Musical and Hanna Montana, he said. He recommended buying Disney on any weakness, especially if it falls below $30 a share.
Topics: Stock Picks |
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