UBS’ Top Quant Stocks In AI, IT, Healthcare & Other Sectors: Top 33 Stocks In All Sectors

2. The Walt Disney Company (NYSE:DIS)

Number of Hedge Fund Investors In Q2 2024: 92

Sector: Communication Services

The Walt Disney Company (NYSE:DIS) is one of the biggest entertainment companies in the world. The firm operates in the film and television industries through a variety of lucrative platforms, and its theme parks are a globally recognized brand name. Consequently, the diversified business model along with a rapidly evolving media industry means that The Walt Disney Company (NYSE:DIS)’s hypothesis depends on several factors. For starters, its theme park business is dependent on the broader economy and travel spending especially as the global industry continues to recover from the coronavirus pandemic. Secondly, The Walt Disney Company (NYSE:DIS) also has to focus aggressively on its direct-to-consumer and streaming initiatives to ensure it captures a fast-growing market held by firms like Netflix. Market share growth in streaming and profitability for DTC can lead to tailwinds for the stock, and The Walt Disney Company (NYSE:DIS) sports businesses such as ESPN also provide it with a sizable base that it can leverage to its advantage.

Mar Vista Investment Partners mentioned The Walt Disney Company (NYSE:DIS) in its Q2 2024 investor letter. Here is what the fund said:

“The Walt Disney Company’s (NYSE:DIS) shares declined after its earnings release, even though the company exceeded recently upgraded financial forecasts. While Disney+ and Hulu reached a milestone by turning their first quarterly profit, the company cautioned about theme park attendance returning to pre-pandemic norms. This signals a deceleration following a period of exceptional growth, impacting the stock as theme parks and experiences account for roughly 60% of Disney’s earnings. Despite broader consumer worries, Disney’s stock is still trading with a significant discount to fair value. We expect the gap between Disney’s market price and its intrinsic value to shrink as its streaming division evolves and increases profitability over time.”