5 Best News and Digital Media Stocks To Buy

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

Number of Hedge Fund Holders: 56

Warner Bros. Discovery, Inc. (NASDAQ:WBD) is a global media and entertainment company with three main segments: Studios, Network, and Direct-to-Consumer. Warner Bros. Discovery, Inc. (NASDAQ:WBD) is one of the top entertainment stocks to invest in. However, the company’s Q4 GAAP EPS of -$0.16 and revenue of $10.28 billion fell short of Wall Street estimates by $0.10 and $140 million, respectively. At the end of Q4, Global Direct-to-Consumer (DTC) subscribers reached 97.7 million, incorporating 1.3 million subscribers from the acquisition of BluTV. 

According to Insider Monkey’s fourth quarter database, 56 hedge funds held stakes in Warner Bros. Discovery, Inc. (NASDAQ:WBD), compared to 63 funds in the last quarter. Harris Associates is the largest stakeholder of the company, with 79.5 million shares worth $904.7 million. 

Longleaf Partners Fund stated the following regarding Warner Bros. Discovery, Inc. (NASDAQ:WBD) in its fourth quarter 2023 investor letter:

“The rules have improved how we analyze existing holdings and influenced the price at which we will buy a new holding and/or trim or add to an existing one. This has resulted in a higher level of resizing positions in the portfolio and exiting some long-term holdings this year. A good example in the portfolio today is Warner Bros. Discovery, Inc. (NASDAQ:WBD), a company that we bought too early but that remains a holding in the portfolio. Our average price for the initial WBD investment in 2021 was $26.48, or a P/V ratio in the mid-60s%. However, P/EV on the initial report was 79%. Under the new rules, we would not pay that price for the company today. We most likely would have waited for a mid-60s% P/EV, which would have equated to a $mid-teens entry price. In this case, we would have missed a too-large initial downturn in the stock price. The overweight rule dictated that we trimmed the position after the price ran up in the first half of 2023, which benefitted overall performance as the stock price subsequently fell again. However, even with the new rule lens, we remain confident in our case for the business and management’s ability to deliver going forward.”