10 Best NASDAQ Stocks Under $20 to Buy

4. Warner Bros. Discovery, Inc. (NASDAQ:WBD)

Number of Hedge Fund Holders In Q2 2024: 48

Share Price: $8.15

Warner Bros. Discovery, Inc. (NASDAQ:WBD) is a media and entertainment giant with a sizeable presence in the industry. It owns some of the most well known entertainment brands in America such as CNN, Warner Bros. Motion Picture Group, TNT, and HBO. Roughly 49% of the firm’s revenue comes from its network business, with movie studios and direct to consumer products accounting for 26% and 25%. In an era where direct to consumer is rapidly gaining share, Warner Bros. Discovery, Inc. (NASDAQ:WBD) has to remain agile to ensure its networks do not lose viewers. Through its scale, the firm can land lucrative deals, and it did so in September by teaming up with America’s biggest pay TV company Charter Communications to offer Discovery Max and Discovery+ to Charter customers free of charge as well as continue broadcasts of CNN, TNT, and other networks. Warner Bros. Discovery, Inc. (NASDAQ:WBD)’s shares jumped by 7% on the announcement, and it could see tailwinds in the industry as other distributors also line up for deals. This provided much needed respite, as the shares tanked by 10% in August after advertising uncertainty prompted a massive $9.1 billion impairment of TV assets.

Longleaf Partners mentioned Warner Bros. Discovery, Inc. (NASDAQ:WBD) in its Q1 2024 investor letter. Here is what the fund said:

“Warner Bros Discovery (WBD) – Media conglomerate Warner Bros Discovery was also a detractor in the quarter. The market disliked the company’s lack of guidance for 2024. While there are tentative signs that the advertising market is slightly improving, we understand why the market remains in show-me mode on this part of the business. The Warner Bros Studio has gone from a big hit with the Barbie movie last summer to some misses lately. As we have discussed before, April 2024 represents the two-year anniversary of Warner Bros and Discovery merging. After this date, the company will have more options to go more on offense. Unfortunately, this is overlooked in the near term by daily Paramount headlines. We are ready to see how the rest of this year plays out. WBD still generates substantial FCF and is de-levering its balance sheet rapidly. The company remains dramatically undervalued today, but we need to see more positives before increasing our position further”