And Disney's got a lot going for it. Disney's got not one, not two, but three successful hit machines in Pixar, Marvel and, starting next year, Star Wars. These are consistent winners that generate amazing returns that can then be amortized over theme parks, merchandise and, of course, sequels. Think about Disney as a consumer products company. Do you really believe that Procter (PG) or a Colgate (CL) can keep coming out with billion-dollar products every quarter as Disney's been doing? When you consider it like that, you have to wonder how you can not own Disney, especially when you know that CEO Bob Iger is in there buying any shares on weakness.
After that is Intel, up 22% since Dow 16,000. Ouch. Lots of people think they have missed Intel because it has gone from the mid-$20s to $30 and change. Is that really a huge distance to traverse, though? Is that such a black eye to have sat out when this stock did nothing for years and years? Forget that it was at $75 15 years ago. Just think that here's a company with a near-3% yield, a fabulous balance sheet and that sells at a discount to the average stock that has just reported much-better-than-expected earnings and has indicated that there is more to come. Plus, it has new leadership in Brian Krzanich, who is done spending money for money's sake and is demanding a much higher return on investment. What's not to like, especially now that PC demand is strengthening? That's right, strengthening. That means gross margins will keep going higher and that's the holy grail of a higher Intel stock price.
The fourth-biggest gainer since Dow 16,000? Merck, up 20%. At one time Merck was the world's most revered drug company with the best franchises in heart drugs, cholesterol and vaccines, among a host of other areas. It then fell on hard times and many thought it has lost its way, which is why it sells at a discount to the average stock in the S&P.
But Merck's woken up. It recently sold its consumer products division to Bayer for $14 billion, a business that a year ago in "Get Rich Carefully" I predicted could be worth as much as $10 billion and was scoffed at by many. It's got a considerable animal health division that could be a terrific standalone venture or could be acquired by Zoetis (ZTS), the Pfizer (PFE) animal health spinoff, at a price that's not nearly factored into the current stock price. I love that business. There's much less government scrutiny and much higher profits.With that cash it could continue to buy back shares or it could raise the dividend. Or, perhaps, it could make an acquisition and change its tax status through a so-called inversion. This is a Merck that wants to make money for its shareholders and CEO Ken Frazier seems to have what it takes to shake up that staid and tired culture.
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