This Disney Trading Strategy Has Beaten The Market In The Past, But Will It Work Again In 2015?

Shares of Walt Disney Co DIS 0.6% are up more than 11 percent in the last three days; the majority of the rise resulting from the company’s stellar earnings report. Disney shareholders have high hopes for the 2015 releases of The Avengers: Age of Ultron and Star Wars Episode 7, both of which have realistic chances at becoming Disney’s highest-grossing movie of all time.

But do Disney’s biggest hits always lead to big returns for shareholders? Take a look at how the stock has reacted to the company’s four highest-grossing movies of all time.

Iron Man 3

Iron Man 3 was a big hit for Disney in 2013, bringing in $409 million at the box office. In the six months following its release, Disney stock lagged the S&P 500 by more than 2 percent.

Interestingly, in the six months prior to the movies release, Disney stock outperformed the S&P by nearly 15 percent.

Toy Story 3

Toy Story 3 was Disney’s biggest hit of 2010, grossing $410 million. In the six months following the movie’s release, Disney stock lagged the S&P 500 by nearly 6 percent.

However, in the six months prior to release, Disney beat the S&P by more than 8.5 percent.

Pirates Of The Caribbean: Dead Man’s Chest

Pirates of the Caribbean: Dead Man’s Chest grossed $423 million for Disney back in 2006. In the six months following the release date, Disney beat the S&P by more than 3 percent.

But the surprising pattern holds for this movie as well. Disney outpaced the S&P 500 by more than 20 percent in the six months leading up to the movie’s release.

The Avengers

Marvel’s The Avengers is Disney’s current highest-grossing film of all time by a wide margin, bringing in $623 million in 2012. In the six months after its release, Disney beat the S&P by nearly 13 percent.

In the six months prior to the release, Disney beat the S&P by more than 14 percent.

Overall Trend?

The trend for these Disney blockbusters seems to be that the biggest returns happen in the months leading up to the movies’ release dates, rather than the months following them. Anticipation drives the stock higher as excitement about the release grows.

This anticipation could be very lucrative for Disney shareholders in 2015, as excitement surrounding this year’s two mega-movies may be at an all-time high. The Avengers: Age of Ultron is set for release on May 1, and Star Wars Episode 7 is scheduled for release on December 18.

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