 Welcome to the channel. This is reliable Rudy in this video We're going to make our part one video for Walt Disney Company now I do apologize and wanted to have my Walt Disney series out last week But I had a wedding that I was a part of for the weekend and rehearsal on Friday and had some work stuff Kind of a build up at the end of the week. So I had to prioritize that But I think the patients will pay off. I got a lot of good information to go over here And yeah, I hope you guys enjoy this video, but before we get into it I'm not a licensed financial advisor. Everything in this video contains only my opinion as for entertainment purposes only Okay, it's going into the video I'm going to treat this like at the stock that I have not looked at before and I still have the earnings report to go look through after this and Followed with that video will be our stock analyzer and then we'll wrap it up with the chart aspect of things So looking at this there are some red flags that I would definitely identify in this metrics tab So without going into any further analysis for it Revenue to that income. This is not equal out to a good profit margin You can see year-to-date profit margins 3.5 percent big disconnect from their five-year average of 8.6 percent Now looking at the PE big disconnect from their five-year average PE Price of sales a little bit on the higher side for these profit margins Same scenario big disconnect and free cash flow from their five-year average It shows that they're paying a dividend, but they are not paying a dividend Let's say announce something in their most recent earnings that they're going to continue that low return on assets and equity and Off of first glance it doesn't look like they invest their money very well either So we're going to dive into these and determine if it is a negative or something to monitor or maybe it could even be a positive or some There's room to improve right there So first we're going to click on this eight pillars tab now You can see off a first glance if I was just pulling this company up knew nothing about them Seven red checkmarks is not is not a good look, but let's remember Disney has a huge moat they own the Disney they own Star Wars they're in the streaming business of things they own the amusement parks. They're Connected with the ESPN and several different TV production production studios Disney has a large mode am I worried about them going out of business? I was I would be baffled if Disney went out of business So going back to this We're going to determine if these are actually red flags or if we can work with these and find a way to flip these to a positive Now I did have someone mentioned to me Hey, I can't use that software that you're using. How do I how can I look at this financial information and? Do what you're doing So for part of this video We're going to go to return on invested capital dot AI and we're going to look through some of these numbers in these metrics So starting with revenue from tooth from 2006 We are going to run this through all the ways I can see consistent growth all the ways through Now They kind of fell off a little bit and slowed down decrease revenue right here So we are going to monitor that before we do our stock analyzer tool now looking at the net profit from 2006 33 billion four and a half four and a half three four four point eight five point six pretty consistent growth in net profit going around here and then boom 2019 to 2020 they went from 11 billion to Negative 2.8 billion now hold that thought before we talk about that some more and I can see they did get back to profitability Looking into the future. Is it possible that they get back on this consistent growth from 2006 to 2018? Very consistent growth and net income. So looking back to our everything money. Am I as worried about this red check mark right here? I'm not as worried about it because they showed me in the in the past that they're able to consistently grow their net income Going back to a turn on invested capital. The next thing we're going to look at is their debt So long-term debt Consistently down here at this 10 billion the 12 billion a little bit of a spike right here in 2016 and they continue They paid off a little bit now 2019 they more than doubled their debt Now keep keep that in mind because this is a big component of my analysis for their financials now 2020-52 that way another big increase in debt now they've slowly started paying this debt off, but let's remember They took on a lot of debt in 2019 and then in 2020 COVID hit and Disney is in a rare scenario where they were Negatively affected by COVID in my opinion because they have theme parks And they have business that they construct where they needed people to be out in the public to be able to benefit from that So they took on a lot of debt and then boom hit by COVID now a couple interesting things that I want to point out the dividend from 2006 consistently increasing their dividend now This was a huge spike in dividend, but if I were to take 87 cents to a dollar 42 Still consistently increasing their dividend now 2019 the year that they had that they increased a lot of debt They have a huge drop-off in their dividend now. They actually cut their dividend So they took on a lot of debt they needed to be able to find ways to pay that debt What is one way to open up capital to be able to pay off debt? Cutting your dividend so do I look at this as a negative some people could have looked at this as a negative I look at it as a as a positive because they Needed to find a way to pay off their debt without issuing even more debt or Diluting a large amount of shares now that leads me to my next point I want to get across for a look at these shares outstanding from 2006. We're gonna move right along Consistently buying back shares now a couple of issuance is here That's nothing to be worried about because the long-term outlook. They've consistently bought back shares now 2019 the year they took on a lot of debt That's a decent spike in shares outstanding now 2020 with COVID they just took out a lot of debt They cut their dividend down so that they can pay off their debt easier But this was not enough you can see that they completely cut this dividend the following year now They had to issue more shares to get capital to be able to pay off that debt But looking long term out into the future from 2022 and beyond are they going to continue issuing shares? That I will leave that up for you to decide but from 2006 to 2018. They consistently bought back shares So something to keep in mind there in my analysis going forward Do I think that they're going to continue diluting shares like this? Let's look at the pillar over the last five years They've issued 15% of their shares. Do I think that's going to continue going forward that is up for me to decide but from 2006 to 2018 Consistently bought back shares. I'm not as worried about this shared illusion That it's showing right here So back to return on vest capital next thing we're going to look at is the net profit margins So from 2006 and moving forward 10 13 12 9 10 12 13 13 and a half for 15 and a half 16 17 16 21 and 2018 16% and boom 2020 they had negative 4.4% profit margin now They've started getting back on track 3 and 3.7 year to date but do I think they're going to Have these low amount of profit margin going forward from 2016 consistent profit margin and increases in profit margins and then the year they Took on a lot of debt. They got hit hard by covid so they're negatively affected by that Do I think they're going to hold these profit margins going forward? I don't I don't think this is going to be the case I'm not going to be plugging in low single-digit profit margins moving forward in my analysis now back to the These pillars these are all red checks, right? five year five year five year five year Looking at this their last three years are definitely skewing their five year numbers So I'm not in my analysis I'm not going to be taking these five-year numbers into account as much when they've showed me from 2006 to 2018 that they have done what they needed to do as a company and I think that they it's potential that they get back on track with that the question that you have to ask yourself Yourself is how long is it going to take them to get back on track? Now the last thing we're going to go over real quick here is the return on invested capital You could sit here and say oh Disney they don't invest their capital very well year to date one percent and five year average 2.8 percent we go back to Return on invest capital right here from 2006 moving forward seven ten nine seven eight nine ten ten eleven and a half thirteen thirteen point seven thirteen Seventeen okay now 2019 huge drop-off right here, and now they had negative return on invest capital 2.1 and 2.6 Moving forward. Do I think Apple are not Apple? Do I think Disney is going to put up a low single-digit return on invested capital? What it's hard for me to think that when they've showed me from 2006 to 2018 that they can deliver a return on invested capital at a Consistent rate so moving forward. I'm not as worried about this red check mark right here Something to something to monitor of course, and this is why in the next video We're going to go into their earnings report before we do the stock analyzer tool, and yeah This is going to wrap up my analysis on like first glance of their financial statements, and yeah I hope you guys enjoy the content, and I hope you return back for the second video on the earnings report And we'll see you on the next one