4. The Walt Disney Company (NYSE: DIS)
Number of Hedge Fund Holders: 134
The Walt Disney Company (NYSE: DIS) is placed fourth on our list of 10 stocks to buy to profit from post-COVID economic recovery. The company’s shares have returned 62% to investors in the past year. The firm, an entertainment and mass media conglomerate, was able to weather the COVID-19 impact better than competitors as it had an internet streaming platform, named Disney+, to offset some of the pandemic losses. As the economy reopens, and theme parks welcome visitors again, the company can benefit a lot from the increased activity.
On May 26, investment advisory maintained a Buy rating on The Walt Disney Company (NYSE: DIS) stock with a price target of $215, implying an upside potential of over 20%. UBS also named Disney among the high conviction picks with strong growth potential in the coming months.
At the end of the first quarter of 2021, 134 hedge funds in the database of Insider Monkey held stakes worth $12.5 billion in The Walt Disney Company (NYSE: DIS), down from 144 in the preceding quarter worth $16.4 billion.
In its Q4 2020 investor letter, Harding Loevner, an asset management firm, highlighted a few stocks and The Walt Disney Company (NYSE: DIS) was one of them. Here is what the fund said:
“One of the original constituents of the Nifty Fifty holds a place in our portfolio today. When we bought Disney three years ago, we wrote that “we view Disney theme parks in the US, Europe, and China as resistant to online substitution.” We did not reckon on a pandemic, which closed all of them, and sent all of usto our couches. Disney, however, wasready for us, brilliantly illustrating the importance of management foresight and change management. Or, as Louis Pasteur said, “chance favors the prepared mind.
A century after its founding in 1923, Disney is in the middle of a bold shift from its legacy media networks & entertainment model—with cable TV, theme parks, and theater films dominating its earnings—to a direct-to-consumer streaming media model. The keys to Disney’s transition: matchless storytelling, coupled with financial strength. The company reliably creates content that people all over the world are eager to consume. It also hastened spending on original content to attract subscribers to its new streaming platform. These factors have allowed Disney to weather the pandemic having expanded its direct engagement with customers. Such connections yield a rich harvest of insights used to customize offerings on a mass scale, reinforcing that engagement in a virtuous circle and thereby raising the lifetime value of each customer. Subscribers to Disney+ reached 86.8 million one year after launch, compared to the 60 – 90 million management projected to reach in 2024. To be sure, Netflix, Apple, and Amazon remain formidable competitors in new-era streaming entertainment (mind what we said about everyone standing up at once), but there’s fight left in this old dog.”
