Is Warner Bros. Discovery (WBD) a Smart Long-Term Buy?

Distillate Capital Partners LLC, an investment management firm, published its second-quarter 2022 investor letter – a copy of which can be downloaded here. Through the sharp sell-off in the first half of 2022, Distillate’s U.S. FSV strategy held up better than the overall market with a decline of 15.80% net of fees vs. a 19.96% decline for the S&P 500 Index. For the same period, Distillate’s Intl. FSV strategy performed roughly in line with the iShares MSCI ACWI ex-US ETF, posting a total return of -18.07% net of fees versus -18.00% for the benchmark. Meanwhile, Distillate’s U.S. SQV’s 2022 first half total return after fees of -17.22% was better than the total return for the iShares Russell 2000 ETF of -23.48% and the iShares Russell 2000 Value ETF’s total return of -17.43%. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, Distillate Capital mentioned Warner Bros. Discovery, Inc. (NASDAQ:WBD) and explained its insights for the company. Founded in 2022, Warner Bros. Discovery, Inc. (NASDAQ:WBD) is a New York City, New York-based multinational mass media and entertainment conglomerate with a $28.6 billion market capitalization. Warner Bros. Discovery, Inc. (NASDAQ:WBD) delivered a -49.92% return since the beginning of the year, while its 12-month returns are down by -53.62%. The stock closed at $11.79 per share on September 29, 2022.

Here is what Distillate Capital has to say about Warner Bros. Discovery, Inc. (NASDAQ:WBD) in its Q2 2022 investor letter:

“Warner Bros. Discovery was the next largest position added to the portfolio and came after a nearly-50% price decline in the quarter. Consequently, the stock offers a mid-teens free cash flow yield and is expected to earn nearly half of its enterprise value in free cash over the next three years.”

Image by Gerd Altmann from Pixabay

Our calculations show that Warner Bros. Discovery, Inc. (NASDAQ:WBD) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Warner Bros. Discovery, Inc. (NASDAQ:WBD) was in 68 hedge fund portfolios at the end of the second quarter of 2022, compared to 47 funds in the previous quarter. Warner Bros. Discovery, Inc. (NASDAQ:WBD) delivered a -10.48% return in the past 3 months.

In September 2022, we also shared another hedge fund’s views on Warner Bros. Discovery, Inc. (NASDAQ:WBD) 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.