Does The Walt Disney Company (DIS) Offer an Attractive Risk/Reward Potential?
Sound Shore Management, an investment management firm, has released its investor letter for the first quarter of 2025. A copy of the letter can be downloaded here. The fund's Investor Class (SSHFX) and Institutional Class (SSHVX) declined 1.93% and 1.89% respectively, in the first quarter of 2025 compared to a 2.14% return for the Russell 1000 Value Index (Russell Value) and -4.27% return for the Standard & Poor 500 Index (S&P 500). Sound Shore's 35-year annualized returns were 10.13% and 10.41% for SSHFX and SSHVX, respectively, as of March 31, 2025, and were ahead of the Russell Value at 9.81% and trailed the S&P 500 at 10.56%. In addition, please check the fund's top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Sound Shore Management highlighted stocks such as The Walt Disney Company (NYSE:DIS). The Walt Disney Company (NYSE:DIS) is an entertainment company that operates through the Entertainment, Sports, and Experiences segments. The one-month return of The Walt Disney Company (NYSE:DIS) was 21.53%, and its shares gained 7.82% of their value over the last 52 weeks. On May 23, 2025, The Walt Disney Company (NYSE:DIS) stock closed at $109.72 per share with a market capitalization of $197.249 billion.
Sound Shore Management stated the following regarding The Walt Disney Company (NYSE:DIS) in its Q1 2025 investor letter:
"Along with concerns about a slowing economy and consumer spending, holdings PayPal and The Walt Disney Company (NYSE:DIS) fell after strong finishes to 2024, despite both having very solid balance sheets. Notwithstanding the economic worries, each has internal change that is driving improved profitability. Media and entertainment leader Disney was lower after giving back a portion of its prior YTD gains. With an impressive breadth of content to drive market share and a steady, cash generating Experiences business (parks, resorts, cruises), we believe Disney is uniquely well positioned. The company's media unit is growing while content spending has come down. We believe their streaming business, which includes ESPN and Hulu, is undervalued and management is raising prices for the service. Trading below 14 times earnings power with a strong balance sheet, renewed dividend and $3 billion annual share buyback program, Disney is an attractive risk/reward with potential to grow both in the US and abroad."
A packed theater of moviegoers watching a blockbuster film produced by the entertainment company.
The Walt Disney Company (NYSE:DIS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 104 hedge fund portfolios held The Walt Disney Company (NYSE:DIS) at the end of the first quarter which was 108 in the previous quarter. While we acknowledge the potential of The Walt Disney Company (NYSE:DIS) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
In another article, we covered The Walt Disney Company (NYSE:DIS) and shared the list of stocks Jim Cramer recently commented on. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
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