We recently published a list of Jim Cramer’s Latest Lightning Round: Top 10 Stocks. In this article, we are going to take a look at where The Walt Disney Company (NYSE:DIS) stands against other top stocks from Jim Cramer’s Latest Lightning Round.
Jim Cramer in a recent program on CNBC recommended investors to avoid worrying when others are anxious or get too excited about something when others are also doing the same. Cramer said by the time an idea is common among investors, its price already reflects its potential.
“Stocks don’t quite travel at the speed of thought but they come pretty close. So the moment a preponderance of hedge fund and mutual fund managers decide that the economy is slowing, speeding up, or flatlining, stocks start trading like that’s already the case. Usually, it takes some time to build that kind of consensus, which is why you rarely see these moves happening instantaneously. But once the big institutional portfolio managers are on the same page about something, you can be pretty darn confident that it’s baked into the averages. This is some basic economics 101 stuff.”
If every piece of news is priced in, does that mean it’s meaningless to invest in stocks and you are better off putting your money in broader market funds? Cramer calls this idea “bogus” and says the market is pretty irrational at times and stocks are incorrectly priced, giving investors an opportunity.
“The simple truth is that markets are not perfectly efficient. In fact, frankly, they’re often irrational. They ignore things, make mistakes, misvalue information every day. And that’s a major reason why anyone can make money picking individual stocks. These anomalies are everywhere, and they can be great for your portfolio,” Cramer added.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In
For this article, we watched the latest programs of Jim Cramer and picked 10 stocks he is talking about these days. With each stock, we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Investors: 76
A caller recently asked Jim Cramer about his thoughts on Paramount Global. Cramer recommended the investor to stay away from the stock and instead buy The Walt Disney Company (NYSE:DIS).
“Over? Don’t go done—let’s skip it. Let’s find something that works. I think that Walt Disney Co (NYSE:DIS), which by the way has pulled back nicely, is a charitable trust name. What a great level to buy. Walt Disney Co (NYSE:DIS) is maybe even a buy tomorrow.”
Disney continued to grow its subscriber base in the fourth fiscal quarter. By the end of October, the company had 56 million paying U.S. subscribers (+1.3M Q/Q) on its main Disney+ platform, along with 66.7 million international subscribers (+3.2M Q/Q).
Average revenue per user rose year over year in both the domestic and international markets. The subscription price hikes in October should also have a positive impact on the segment’s profitability moving forward. A major highlight from Disney’s fourth-quarter results was its streaming business, which reported its first significant operating profit. In Q3’24, Disney earned $0.3B from its streaming operations.
Meridian Hedged Equity Fund stated the following regarding The Walt Disney Company (NYSE:DIS) in its Q2 2024 investor letter:
“The Walt Disney Company (NYSE:DIS) operates a diversified entertainment business with theme parks, media networks, and streaming services. We own Disney because we believe its strong brand, valuable IP, and expanding streaming offerings will drive sustainable long-term growth. The company’s stock, however, underperformed in the quarter due to concerns about a slowdown in growth at its theme park division. While park revenue still grew by 10% year-over-year, management’s commentary suggested a moderation in post-pandemic demand and rising costs, leading to a disappointing outlook for park operating income in the second half of the year. This overshadowed the positive news that the company’s streaming segment, driven by strong subscriber growth at Disney+, reached profitability ahead of schedule. We held our position and will continue to monitor the performance of the theme park division.”
Overall, DIS ranks 4th on our list of top stocks from Jim Cramer’s Latest Lightning Round. While we acknowledge the potential of DIS, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DIS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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