After nearly 150 days, the Hollywood writers strike appears to be coming to an end.
On Sunday, the Writers Guild of America and the Alliance of Motion Picture and Television Producers announced they had reached a tentative labor agreement.
In May, the writers initiated a work stoppage as negotiations broke down with various major studios regarding protections against the use of artificial intelligence as well as increases for compensation for streamed content. Soon after, the acting guild, SAG-AFTRA, followed suit, seeking contract updates similar to those requested by the writers, along with improved working conditions and health and pension benefits. That conflict is ongoing.
While the final contract still being drafted, it offers a glimmer of hope for not only movie lovers, but those invested in media and entertainment companies as well.
Although shares of major telecom giants were down on Monday, it appears a lot of gurus are banking on the strikes coming to a peaceful and fair conclusion soon.
The GuruFocus Aggregated Portfolio, a Premium feature based on 13F filings as of the end of the second quarter, found entertainment companies that are popular with gurus include The Walt Disney Co. (DIS, Financial), Warner Bros. Discovery Inc. (WBD, Financial), Netflix Inc. (NFLX, Financial) and Paramount Global (PARA, Financial).
Investors should be aware that 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Walt Disney
With a combined equity portfolio weight of 36.55%, 32 gurus are invested in Disney (DIS, Financial).
The Burbank, California-based company, which is known for its host of iconic characters and theme parks, has a $148.24 billion market cap; its shares were trading around $81.02 on Monday with a price-earnings ratio of 65.87, a price-book ratio of 1.48 and a price-sales ratio of 1.69.
The GF Value Line suggests the stock is significantly undervalued currently based on its historical ratios, past financial performance and analysts’ future earnings projections.
At 77 out of 100, the GF Score indicates the company is likely to have average performance going forward. While it received high ratings for profitability and value, the growth, financial strength and momentum ranks are more moderate.
Of the gurus invested in Disney, Ken Fisher (Trades, Portfolio) has the largest stake with 0.36% of its outstanding shares. Nelson Peltz (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), Philippe Laffont (Trades, Portfolio), Diamond Hill Capital (Trades, Portfolio), the T Rowe Price Equity Income Fund (Trades, Portfolio) and Tom Gayner (Trades, Portfolio), among many others, also have notable positions in the stock.
Warner Bros. Discovery
Twenty-four gurus have positions in Warner Bros. Discovery (WBD, Financial), representing a combined equity portfolio weight of 25.64%.
The media conglomerate headquartered in New York City, which owns a number of TV networks, including HBO, Food Network and CNN, has a market cap of $25.98 billion; its shares traded around $10.66 on Monday with a price-book ratio of 0.57 and a price-sales ratio of 0.63.
According to the GF Value Line, the stock, while undervalued, is a possible value trap currently. As such, potential investors should do thorough research before making a decision.
The GF Score of 81 implies the company has good outperformance potential, driven by high growth, profitability and momentum ratings, a moderate value rank and low financial strength.
With a 1.04% stake, Seth Klarman (Trades, Portfolio) is Warner Bros. Discovery’s largest guru shareholder. Other top guru investors include Hotchkis & Wiley, Bill Nygren (Trades, Portfolio), the Smead Value Fund (Trades, Portfolio), Mason Hawkins (Trades, Portfolio), Yacktman Asset Management (Trades, Portfolio), Mario Gabelli (Trades, Portfolio) and Steven Cohen (Trades, Portfolio).
Netflix
Netflix (NFLX, Financial) is held by 22 gurus with a combined equity portfolio weight of 26.05%.
The Los Gatos, California-based streaming entertainment company has a $170.52 billion market cap; its shares were trading around $384.80 of Monday with a price-earnings ratio of 40.98, a price-book ratio of 7.47 and a price-sales ratio of 5.42.
Based on the GF Value Line, the stock appears to be modestly undervalued currently.
The company has high outperformance potential with a GF Score of 94. It raked in high ratings for three of the criteria, but the value and momentum ranks are more moderate.
Baillie Gifford (Trades, Portfolio) is Netflix’s largest guru shareholder with a 1.28% stake. Fisher, Frank Sands (Trades, Portfolio), Laffont and Tom Russo (Trades, Portfolio) also own the stock.
Paramount Global
Representing a combined equity portfolio weight of 3.86%, 13 gurus are invested in Paramount Global (PARA, Financial).
The mass media and entertainment conglomerate headquartered in New York has a market cap of $8.37 billion; it shares traded around $12.66 on Monday with a price-book ratio of 0.38 and a price-sales ratio of 0.27.
The GF Value Line suggests the stock, while undervalued, is a possible value trap. As a result, potential investors should be cautious while making their decision.
Supported by a high profitability rank and more moderate ratings for the other four criteria, the GF Score is 70. This means the company has poor performance potential.
Holding a 14.40% stake, Warren Buffett (Trades, Portfolio) has the largest stake in Paramount. The stock is also being held by John Rogers (Trades, Portfolio), Hotchkis & Wiley, Laffont and Jeremy Grantham (Trades, Portfolio), among others.
Other popular picks
Additional media and entertainment companies that were broadly held by gurus as of the three months ended June 30 included Madison Square Garden Sports Corp. (MSGS, Financial), Live Nation Entertainment Inc. (LYV, Financial), World Wrestling Entertainment Inc. (WWE, Financial), New Corp. (NWSA, Financial) and Fox Corp. (FOXA, Financial).
