Walt Disney Co. (DIS)

Numbers didn't meet market expectations, so stock fell. Integrating complex companies. Programming content for a wide range of ages, so better than Netflix. Streaming online. Parks business, entertainment business. Thinks they'll keep paying down debt. Great story and brand. Yield is 1.32%. (Analysts’ price target is $154.71)

Their Q3 just disappointed; their Fox assets won't be accretive until 2021. The street sees no growth into 2020, but Disney is a huge content play that'll compete with Netflix. You're paid to wait. Has 22x earnings, but he trusts growth will come with the rise in streaming in the coming years. Great managers, powerful content and fine execution. (Analysts’ price target is $154.71)

A 3-year hold They've done well launching Disney+ and condolidating Hulu to move quickly into streaming. Movies still generate revenue but are less important now. The theme parks are also doing well. The issue is that Disney must pay licensees to stream their content and this will eat into profits. This will limit EPS growth in this transition period. Disney's entry will actually be positive for Netflix, but will cut more cable subscriptions. This will be a multi-player industry.

45% of their business comes from the amusement parks, and 35% from the media, and the rest from consumers. The Fox deal was big. they own Hulu. They are one of the few who can compete with Netflix with a huge content library. Has lots of fresh cash flow with little debt. They will continue to grow (Analysts’ price target is $152.91)

They are much cheaper than Netflix -- only 16 times earnings. Price is pausing, but longer term it has a great future following the 21st Century acquisition. They own Hulu as well. Yield 1.26% (Analysts’ price target is $149.28)

He owns both, but Netflix will see more grwoth as it penetrates internationally and doubling worldwide subscribers. They could expand into music and games. Disney pays a dividend, but Netflix will give you a higher total return. With Disney, be patient as they get into streaming, especially internationally.

In 5 years They're taking on Netflix with some fine programming, but he wonders how much room there will be in the streaming market as more players enter? More competition may pressure Netflix stock down the road. Disney has had a long-term peak of 4x adjusted book value historically. It's now above that ($131). As long as the stock stays above that, then the market will believe in Disney. But watch this very carefully. Right now is a real line in the sand.