Jim Cramer says he’d buy Disney after shares plunge on Netflix news
CNBC’s Jim Cramer said Friday he sees the Disney stock sell-off as an opportunity for investors.
Shares of the media and entertainment giant fell 6.94% to hit a new 52-week low during the session. However, the ‘Mad Money’ host said he wouldn’t shy away from the stock because its steep drop appears to be due to Netflix’s forecast of a slowdown in subscriber growth.
Netflix’s forecast, offered Thursday night when the company reported earnings, spooked investors, and the company’s stock fell 21.8% on Friday.
“I want to own the stock of longtime, great Americans who failed out of guilt, and that’s exactly what happened to Disney stock today,” Kramer said, noting that he wasn’t allowed to add to his charitable foundation position at Disney. on Friday because he mentioned the shares on TV in the morning. Kramer’s ethical policy is that he waits 72 hours before making a stock deal, which he discusses on the CNBC TV show.
Kramer’s trust bought back Disney shares in September, about three months after it completely exited its positions for the first time in 16 years. The trust increased shares at the end of November and then again in December.
On Friday, Kramer admitted he was “too early” with Disney, citing the fact that the stock is trading lower than when the trust made the purchases.
“But it’s time to stop mixing speculative stories with investment grade stories. Many of the shares that have been wiped out here are from companies that don’t have a lot of income, companies that mostly trade on hype or hope,” Cramer said.
He said he sees a number of speculative assets, including cryptocurrencies and stocks that went public through a reverse merger with a special acquisition company, that deserve to be fought right now as Wall Street prepares for a likely interest rate hike. by the Federal Reserve System.
“But you can’t just extrapolate the weakness of one company that’s doing really well, Netflix, to a bunch of other well-known brand names that make fantastic products and make good money, like Disney,” Cramer said.
“I’m not saying Netflix isn’t worth owning. At some price, it will definitely be, ”he added. “I’m saying that there are a lot of high quality companies that have come under fire today because of Netflix, and these were the best ones to buy.”
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