5 Most Promising Stocks to Buy Before They Take Off

4. Warner Bros. Discovery, Inc. (NASDAQ:WBD)

Performance (YTD) as of April 23: -26.66%

Average Upside Potential as of April 23: 59.46%

Number of Hedge Fund Holders: 56

Warner Bros. Discovery, Inc. (NASDAQ:WBD) is a media and entertainment company that operates through three segments, Studios, Network, and DTC. As of April 23, the stock’s performance has declined by 26.66% year-to-date.

Based on 9 Wall Street analysts’ ratings, Warner Bros. Discovery, Inc. (NASDAQ:WBD) has a consensus rating of Moderate Buy and the average price target of $13.61 has an upside of 59.46% to the last price of $8.54, as of April 23.

Warner Bros. Discovery, Inc. (NASDAQ:WBD) was part of 56 hedge funds’ portfolios in Q4 of 2023 with a total stake value of $1.122 billion. As of December 31, 2023, Harris Associates is the biggest shareholder in the company and has a position worth $904.761 million.

Longleaf Partners stated the following regarding Warner Bros. Discovery, Inc. (NASDAQ:WBD) in its fourth quarter 2023 investor letter:

“The rules have improved how we analyze existing holdings and influenced the price at which we will buy a new holding and/or trim or add to an existing one. This has resulted in a higher level of resizing positions in the portfolio and exiting some long-term holdings this year. A good example in the portfolio today is Warner Bros. Discovery, Inc. (NASDAQ:WBD), a company that we bought too early but that remains a holding in the portfolio. Our average price for the initial WBD investment in 2021 was $26.48, or a P/V ratio in the mid-60s%. However, P/EV on the initial report was 79%. Under the new rules, we would not pay that price for the company today. We most likely would have waited for a mid-60s% P/EV, which would have equated to a $mid-teens entry price. In this case, we would have missed a too-large initial downturn in the stock price. The overweight rule dictated that we trimmed the position after the price ran up in the first half of 2023, which benefitted overall performance as the stock price subsequently fell again. However, even with the new rule lens, we remain confident in our case for the business and management’s ability to deliver going forward.”