3. The Walt Disney Company (NYSE: DIS)
Number of Hedge Fund Holders: 134
The Walt Disney Company (NYSE: DIS) ranks 3rd on the list of 10 best stocks to buy for your child. The California-based entertainment giant owns and operates amusement parks, film studios, television stations, and streaming services. After more than a year of being closed, Disneyland and Disneyland Adventure reopened their doors to the public in April. The Walt Disney Company owns direct-to-consumer entertainment channels namely Disney+, ESPN+, and Hulu with current paying subscribers amounting to 103.6 million, 13. 8 million, and 41.6 million respectively.
The stock has returned over 42% to investors over the past twelve months. The company has a market cap of $322 billion and second-quarter revenues came in at $15.6 billion. Although Disneyland and The company posted earnings for the second fiscal quarter, with earnings per share of $0.79, which was $0.53 higher than market expectations. On May 18, Deutsche Bank maintained a Buy rating on The Walt Disney Company, with a price target of $213 per share. DIS stock currently trades at $176.99 per share.
There were 134 hedge funds that reported owning stakes in The Walt Disney Company (NYSE: DIS) at the end of the first quarter, down from 146 funds a quarter earlier. The total value of these stakes at the end of Q1 is $12.6 billion.
In its Q4 2020 investor letter, Harding Loevner, an investment management firm, highlighted a few stocks and The Walt Disney Company (NYSE: DIS) was one of them. Here is what the fund said:
“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.”
