RiverPark Funds, an investment management firm, published its “RiverPark Large Growth Fund” second quarter 2021 investor letter – a copy of which can be downloaded here. The RiverPark Large Growth Fund (the “Fund”) returned 13.1% for the second quarter of 2021, while its benchmarks, the S&P 500 Total Return Index (“S&P”) advanced 8.5%, the Russell 1000 Growth Total Return Index (“RLG”) returned 11.9%, while the Russell 1000 Value Total Return Index returned 5.2%. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
In the Q2 2021 investor letter of RiverPark Funds, the fund mentioned The Walt Disney Company (NYSE: DIS), and discussed its stance on the firm. The Walt Disney Company is a Burbank, California-based mass media company, that currently has a $321.8 billion market capitalization. DIS delivered a -2.24% return since the beginning of the year, while its 12-month returns are up by 37.53%. The stock closed at $177.13 per share on August 06, 2021.
Here is what RiverPark Funds has to say about The Walt Disney Company in its Q2 2021 investor letter:
“DIS shares declined for the quarter, taking a pause after a big fourth quarter and first quarter stock price advance, as Disney+ subscriber numbers were disappointing to investors. Disney+, the company’s DTC streaming business, had blown past previous subscriber projections, having gone from zero to 104 million in 17 months, but investors were now expecting 109 million subscribers. Management still expects significant continued growth to 230-260 million subscribers in 2024.
DIS is blessed with a deep library of unique content that includes both live sports (providing large, non-time shifted audiences) and incomparable brands including Disney, Marvel, Pixar and Lucasfilm, as well as the ABC network. The company also has a wealth of upcoming new content, expecting over 100 original titles per year, including two new Star Wars spin-off series, 10 Star Wars films, 10 Marvel films, 15 Disney and Pixar films and 15 Disney and Pixar series.
Now that the disruption in its theme park, cruise and theatrical businesses appears to be coming to an end, we believe that Disney is among the best-positioned media companies in the new landscape to combine multi-channel and DTC distribution. We also note that DIS has an extremely strong balance sheet and a growing pool of free cash flow to be used both to return to shareholders and to invest in future opportunities.”
Based on our calculations, The Walt Disney Company (NYSE: DIS) ranks 10th in our list of the 30 Most Popular Stocks Among Hedge Funds. DIS was in 134 hedge fund portfolios at the end of the first quarter of 2021, compared to 144 funds in the fourth quarter of 2020. The Walt Disney Company (NYSE: DIS) delivered a -3.89% return in the past 3 months.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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Disclosure: None. This article is originally published at Insider Monkey.
