The Walt Disney Co (NYSE:DIS) was the worst-performing stock in the Dow Jones Industrial Average last year and it's not showing any signs of improvement so far in 2022. Less than a month into the new year, Disney shares are down nearly 12% year-to-date, but Jim Cramer thinks the sell-off is overdone. Here's why.
What Happened: Cramer announced Friday that he planned to buy 75 Disney shares for his charitable trust portfolio around the $136 level.
"We want to get the rest of that WMT-sale cash to work," Cramer said in a letter to members of CNBC's "Investing Club."
He attributed a lot of the selling pressure to Netflix Inc's (NASDAQ:NFLX) most recent earnings results.
Netflix shares traded more than 20% lower when the streaming giant reported slowing subscriber growth, citing increased competition.
Related Link: Netflix Falls On Q4 Earnings Results: Here's Why And What Investors Need To Know
Investors likely thought the same thing was happening at Disney, Cramer said, adding that the downward momentum was probably "further exacerbated" by the broader market sell-off.
Why It Matters: "However, we think that narrative fails to account for key differences between Netflix and Disney," Cramer said. "For starters, Disney is so much more than a streaming platform."
Disney's other focuses outside of streaming are exactly the types of businesses that Cramer thinks investors should want to own right now.
"Businesses such as cruises and theme parks, experiential entertainment offerings that cooped-up-for-too-long people will flock to when Covid eventually eases," he said.
The multipronged approach "provides Disney with an incredibly powerful flywheel that few others in the space can leverage for increased engagement and user monetization," according to Cramer.
He noted that he still expects Disney+ to continue to grow as it focuses on international expansion in 2022.
Disney is set to announce its fiscal first-quarter financial results after the market closes on Feb. 9.
DIS Price Action: Disney has traded as low as $129.26 and as high as $203.02 over a 52-week period.
The stock was up 1.46% at $137.42 Friday afternoon.
Photo: gullah from Pixabay.
