Here's Why You Should Hold The Walt Disney Company (DIS)?

Ashva Capital Management, an investment management company, released its Q3 2025 investor letter. A copy of the letter can be downloaded here. The portfolio returned 10.16% in Q3 2025, outpacing the S&P 500’s 7.79% price-only return. The gains have more than compensated for the first-quarter decline, making it ahead on a year-to-date basis. This quarter highlights the lasting strength of strategy: investing in high-quality companies, remaining fully invested, and allowing time to work in favor. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Ashva Capital 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 -4.25%, and its shares gained 14.90% of their value over the last 52 weeks. On October 14, 2025, The Walt Disney Company (NYSE:DIS) stock closed at $111.17 per share, with a market capitalization of $199.876 billion.

Ashva Capital Management stated the following regarding The Walt Disney Company (NYSE:DIS) in its third quarter 2025 investor letter:

"The Walt Disney Company's (NYSE:DIS) fiscal Q3 (April–June 2025) results showed continued progress in its transformation. Total revenue increased 2% year-over-year to $23.7 billion, income before taxes rose 4%, and segment operating income climbed 8% to $4.6 billion. Direct-to-consumer revenue grew 6%, with streaming subscribers rising to 183 million. CEO Bob Iger emphasized the upcoming launch of an ESPN direct-to consumer service and the integration of Hulu into Disney+, underscoring management’s focus on monetizing world-class content.

While there’s still a meaningful amount of debt on the balance sheet, the free-cash-flow turnaround has been remarkable. Disney has leveraged the stability of its parks segment and improved streaming economics to boost trailing 12-month free cash flow from approximately $8.4 billion six months ago to $11.5 billion today. As streaming continues to scale—and ESPN’s eventual streaming launch begins contributing—we expect further growth in both revenue and free cash flow.

We view the valuation as compelling at current levels and would look to add incrementally on any pullback below $100. On the upside, we believe the long-term potential for Disney’s streaming ecosystem remains underappreciated by the market. Even if shares were to double from here, we see no reason to exit, given the company’s enduring brand power, global reach, and accelerating cash generation."

The Walt Disney Company (NYSE:DIS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 111 hedge fund portfolios held The Walt Disney Company (NYSE:DIS) at the end of the second quarter, which was 104 in the previous quarter.  While we acknowledge the potential of The Walt Disney Company (NYSE:DIS) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered The Walt Disney Company (NYSE:DIS) and shared the list of stocks Jim Cramer discussed. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.