Jim Cramer’s Latest Lightning Round: Top 10 Stocks

4. Walt Disney Co (NYSE:DIS)

Number of Hedge Fund Investors: 76

A caller recently asked Jim Cramer about his thoughts on Paramount Global. Cramer recommended the investor to stay away from the stock and instead buy Walt Disney Co (NYSE:DIS).

“Over? Don’t go done—let’s skip it. Let’s find something that works. I think that Walt Disney Co (NYSE:DIS), which by the way has pulled back nicely, is a charitable trust name. What a great level to buy. Walt Disney Co (NYSE:DIS) is maybe even a buy tomorrow.”

Disney continued to grow its subscriber base in the fourth fiscal quarter. By the end of October, the company had 56 million paying U.S. subscribers (+1.3M Q/Q) on its main Disney+ platform, along with 66.7 million international subscribers (+3.2M Q/Q).

Average revenue per user rose year over year in both the domestic and international markets. The subscription price hikes in October should also have a positive impact on the segment’s profitability moving forward. A major highlight from Disney’s fourth-quarter results was its streaming business, which reported its first significant operating profit. In Q3’24, Disney earned $0.3B from its streaming operations.

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.”