More Squawk From Jim Cramer: Judging Disney (DIS) Stock Short-Term is Missed Opportunity

NEW YORK (TheStreet) -- Walt Disney Co. (DIS) - Get Report stock is down 4.37% to $101.94 in early-afternoon trading on Wednesday after reporting weaker-than-expected 2016 second quarter revenue and its first earnings miss in five years. 

"I'm taking the other side of the trade on this negativity," TheStreet's Jim Cramer said on CNBC's "Squawk on the Street" this morning. 

This morning's selloff is driven by investors' concerns about Disney's weaker-than-expected revenue within its media networks and parks and resorts segments. 

But the company also reported strong revenue within its studio entertainment division, helped by blockbuster movies such as Star Wars: The Force Awakens and Zootopia, which Cramer believes is being overlooked. 

"I am thinking over and over again of the fact that my kids went to see Star Wars three times, and I saw Star Wars three times," Cramer mentioned. "I don't know many companies that have that kind of pull."

He added that taking young children to see Disney movies is like a rite of passage for many.

Cramer did concede that issues within the company's media networks segment and the drop in ESPN subscribers pose a problem in the near term.

"Short term, I've got a problem," he stated. "But I can't grade this company short term anymore."

There were quarters when Cramer said that he was tempted to grade Amazon.com (AMZN) and Netflix (NFLX) short term, and there was a quarter when he thought Facebook (FB) had lost its way because of mobile. 

"If we let Disney be defined by ESPN and not by the slate of movies coming out in the next five years, I think we're going to miss a great opportunity," he stated in the above video. "This company has got double digit growth, it's got a good balance sheet, it's got Shanghai Disney. I know I'm fighting the tide by saying good things about it, but I'm willing to fight that tide."

He pointed out that years from now we will most likely be watching the latest iteration of Captain America and the seventh Frozen movie, and still be playing video games based on Disney characters.

Electronic Arts (EA) stock is soaring more than 13% this afternoon as investors are drawn to a company that benefits from Disney's Star Wars games without any of the uncertainty regarding ESPN subscriber growth, Cramer pointed out this morning. 

"I'm just urging for a little bit less myopia," Cramer said, adding that he's taking a long-term view on Disney.

Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of A-.

Disney's strengths such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and expanding profit margins outweigh the fact that the company has had lackluster performance in the stock itself.

You can view the full analysis from the report here: DIS

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.