Jim Cramer on Netflix and Other Stocks

5. The Walt Disney Company (NYSE:DIS)

Number of Hedge Fund Holders: 92

The Walt Disney Company (NYSE:DIS) is a significant force in the global entertainment industry and offers its services in various sectors including film and television production, streaming services, and theme park management. Cramer weighed in on the company and expressed a desire to buy the stock. He believes the stock is performing better than many realize and feels it deserves more recognition. Despite analysts being critical, he encouraged buying more shares of the company stock.

“It’s come down quite a bit. It sells at 18 times earnings. It’s down today because of I think the storms, but you know what? Disney is doing much better than people realize. And it’s about time, people started giving a little more respect. I’m a buyer of it. The analysts are dumping all over it. They’re dumping all over it now. I say buy more Disney.”

In the third quarter, Disney (NYSE:DIS) reported impressive financial performance, with revenues rising to $23.2 billion, up from $22.3 billion in the same period the previous year. The growth was attributed to strong results in both the entertainment segment and direct-to-consumer (DTC) services.

It achieved profitability across its combined streaming operations for the first time, a significant milestone that was reached ahead of prior expectations. The DTC segment, which has seen improvements, generated a positive operating income of $47 million in this quarter.

Disney (NYSE:DIS) is focused on its experiences segment, as this area plays a major role in the company’s competitive position. Recognizing its importance, the company has announced plans to invest $60 billion over the next decade to expand and advance its offerings in this segment. Additionally, the company updated its adjusted EPS growth target for the full year to an ambitious 30%.

Meridian Hedged Equity Fund stated the following regarding The Walt Disney Company (NYSE:DIS) in its Q2 2024 investor letter:

“The Walt Disney Company (NYSE:DIS) operates a diversified entertainment business with theme parks, media networks, and streaming services. We own Disney because we believe its strong brand, valuable IP, and expanding streaming offerings will drive sustainable long-term growth. The company’s stock, however, underperformed in the quarter due to concerns about a slowdown in growth at its theme park division. While park revenue still grew by 10% year-over-year, management’s commentary suggested a moderation in post-pandemic demand and rising costs, leading to a disappointing outlook for park operating income in the second half of the year. This overshadowed the positive news that the company’s streaming segment, driven by strong subscriber growth at Disney+, reached profitability ahead of schedule. We held our position and will continue to monitor the performance of the theme park division.”