In this article we take a look at Jacob Rothschild’s Q1 portfolio. If you want to read our detailed analysis of Rothschild’s investment philosophy and some of the top stocks in his portfolio, go directly to 10 Best Stocks to Buy According to Jacob Rothschild’s RIT Capital.
5. The Walt Disney Company (NYSE: DIS)
RIT Capital’s Stake Value: $36,797,000
Percent of RIT Capital’s 13F Portfolio: 3.9%
Number of Hedge Fund Holders: 134
The Walt Disney Company (NYSE: DIS) is an American mass media and entertainment company operating globally. It is one of the biggest companies with a $320 billion market cap. At the end of Q1 2021, Jacob Rothschild’s RIT Capital owns 199,400 shares in the company, worth $36 million.
The Walt Disney Company (NYSE: DIS) generated a revenue of over $15.6 billion in fiscal Q2. The earnings per share EPS stood at $0.72, up from $0.60 a quarter earlier. The stock has also soared by 56.7% in the past year but declined 0.62% year to date.
“One of the original constituents of the Nifty Fifty holds a place in our portfolio today. When we bought Disney three years ago, we wrote that “we view Disney theme parks in the US, Europe, and China as resistant to online substitution.” We did not reckon on a pandemic, which closed all of them, and sent all of us to our couches. Disney, however, was ready for us, brilliantly illustrating the importance of management foresight and change management. Or, as Louis Pasteur said, “chance favors the prepared mind.”
A century after its founding in 1923, Disney is in the middle of a bold shift from its legacy media networks & entertainment model—with cable TV, theme parks, and theater films dominating its earnings—to a direct-to-consumer streaming media model. The keys to Disney’s transition: matchless storytelling, coupled with financial strength. The company reliably creates content that people all over the world are eager to consume. It also hastened spending on original content to attract subscribers to its new streaming platform. These factors have allowed Disney to weather the pandemic having expanded its direct engagement with customers. Such connections yield a rich harvest of insights used to customize offerings on a mass scale, reinforcing that engagement in a virtuous circle and thereby raising the lifetime value of each customer. Subscribers to Disney+ reached 86.8 million one year after launch, compared to the 60 – 90 million management projected to reach in 2024. To be sure, Netflix, Apple, and Amazon remain formidable competitors in new-era streaming entertainment (mind what we said about everyone standing up at once), but there’s fight left in this old dog.”