5 Best Entertainment Stocks to Buy

1. The Walt Disney Company (NYSE:DIS)

Number of Hedge Fund Holders: 109

The Walt Disney Company (NYSE:DIS) is a California-based mass media and entertainment company. The company has a diverse portfolio which includes films, theatre, television, theme parks, sports content, cruise lines, along with many others.

The Walt Disney Company (NYSE:DIS) is one of the best entertainment stocks because of its multiple growth drivers. The company is expected to generate some decent recurring revenue in the Halloween season with its cult classics like Hocus Pocus and Halloween Town. Furthermore, the company has expanded its Disney+ streaming services to 42 new countries. The number of subscribers for the service rose from 26.5 million in Q1 of 2020 to 152.1 million in Q3 2022. The Disney+ service is one of the most significant sources of future cash flow, and increased revenue and earnings.

Moreover, The Walt Disney Company (NYSE:DIS) recently opened its parks after the COVID lockdowns and saw a huge comeback in that business. The park revenue surged by 70% to $7.4 billion in one year even though the Asian parks remain closed. 

On October 4, JPMorgan analyst Philip Cusick maintained an Outperform rating on The Walt Disney Company (NYSE:DIS) and lowered his price target to $145 from $160. 

Here is what Oakmark Fund had to say about The Walt Disney Company (NYSE:DIS) in its Q2 2022 investor letter:

“Disney (NYSE:DIS) is one of the most beloved consumer companies in the world. Its media business has a rich library of intellectual property, which provides a powerful engine for creating new content across the Disney, Pixar, Marvel, and Star Wars brands. This content also contributes to the success of Disney’s theme parks, which generated nearly half the company’s earnings and grew more than 10% annually in the decade prior to the pandemic. Shares have fallen nearly 50% over the past year as investors worried about the company’s ability to transition its media business to a direct-to-consumer streaming world. This transition has required management to make investments in its Disney+ streaming service that are depressing profitability today. However, we believe these investments will ultimately produce attractive returns as Disney+ continues to grow subscribers and increase pricing over time. As a result, we were able to purchase shares at a substantial discount to our estimate of intrinsic value.”

You can also take a look at 12 Best Hemp Stocks To Buy and Best Crypto Stocks To Buy.

Follow Insider Monkey on Twitter