'Fast Money' Recap: Disney Keeps Its Magic Flowing
Shares of Disney (DIS) - Get Report were unchanged in Thursday's after-hours trading session. The company beat earnings per share estimates, but slightly missed analysts' expectations for revenue results despite growing sales 9% year-over-year.
The cable results were "disastrous" for CBS (CBS) - Get Report and Time Warner (TWX) but were pretty good at Disney, Guy Adami, managing director of stockmonster.com, said on CNBC's "Fast Money" show.
This is important because Disney's cable results -- particularly ESPN -- were cause for concern back in August, when the stock plunged 20% from its highs. Disney has premium content and a top-notch brand. As a result, it deserves the higher valuation that it holds over its peers, Adami said.
Brian Kelly, founder of Brian Kelly Capital, said he is a "little bit concerned" for Disney stock because it rallied almost 10% into earnings. Theme park results were weaker than expected, Kelly said, and would be nervous if he were long the stock.
Steve Grasso, director of institutional sales at Stuart Frankel, is long the stock and said the recent rally isn't a cause for concern, given that the stock traded as high as $122 just a few months ago. Star Wars will be one of the top-three all-time grossing films, which will only help Disney going forward.
Live sports will help Disney in the "cord-cutting" fight, said Dan Nathan, co-founder and editor of riskreversal.com. While there is a broad shift toward cord-cutting and streaming, Disney will find a way to remain competitive.
Barton Crockett, senior research analyst at FBR Capital Markets, has a buy rating and $124 price target on Disney. The company did fine on its recent results, and there's still a lot of upcoming catalysts, including Star Wars and the Shanghai theme park set to open in 2016. As for cord-cutting, Crockett said the move to streaming is a slow grind, not a rapid shift, so it's not likely to catch Disney management off-guard.
Facebook (FB) - Get Report reported earnings on Wednesday night, and the stock traded higher Thursday. The company now has a larger market cap than General Electric (GE) - Get Report .
Nathan drew comparisons to 2000, when previous tech darlings touted their swelling market caps over traditional mega-stocks. Nathan said the rally in growth stocks is like to continue for now but it won't end well when it's over. Kelly said investors would be well off shorting Facebook and buying General Electric and seeing how it plays out over 10 years.
Adami said he likes Facebook but finds General Electric an attractive buy. The company will get a higher valuation as it returns to its industrial roots, he added. Grasso pointed out Facebook still has a lot of untapped growth potential, mainly from virtual reality, Instagram and WhatsApp.
The conversation turned to Apple (AAPL) - Get Report on reports the company has sold seven million Apple Watches since its launch and that the iPhone 7 may be launched sooner than expected.
Grasso is long the stock. Shares seem likely to slowly drift higher to sideways. While this might not be exciting for some investors, he finds the slow and steady action attractive. He also likes Fitbit (FIT) - Get Report and doesn't think the Apple Watch is hurting its sales.
Adami said investors should stay long Apple because the stock is likely to climb back to $130. Nathan added that the stock has support around $110, and resistance at $130. But Kelly is concerned Apple stock is up roughly 12% in the past month. He said the iPhone 6s doesn't have a lot of improvements and it seems best to avoid the stock.
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