Is Disney (DIS) a Smart Long-Term Buy?

Oakmark Funds, an investment management firm, published its “Oakmark Fund” second quarter 2022 investor letter – a copy that can be downloaded here.  The Oakmark Fund returned -17.8% during the second quarter, underperforming the S&P 500 Index’s return of -16.1%. In constructing portfolios for its clients, the fund seeks out companies that it believes are trading in the market at significant discounts to their underlying value. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, Oakmark Fund mentioned The Walt Disney Company (NYSE:DIS) and explained its insights for the company. Founded in 1923, The Walt Disney Company (NYSE:DIS) is a Burbank, California-based multinational mass media and entertainment conglomerate with a $188.2 billion market capitalization. The Walt Disney Company (NYSE:DIS) delivered a -33.28% return since the beginning of the year, while its 12-month returns are down by -41.57%. The stock closed at $103.35 per share on July 20, 2022.

Here is what Oakmark Fund has 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.”

spatuletail/Shutterstock.com

Our calculations show that The Walt Disney Company (NYSE:DIS) ranks 11th on our list of the 30 Most Popular Stocks Among Hedge Funds. The Walt Disney Company (NYSE:DIS) was in 113 hedge fund portfolios at the end of the second quarter of 2022, compared to 111 funds in the previous quarter. The Walt Disney Company (NYSE:DIS) delivered a -17.03% return in the past 3 months.

In June 2022, we also shared another hedge fund’s views on The Walt Disney Company (NYSE:DIS) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.

Disclosure: None. This article is originally published at Insider Monkey.