Why Short Selling Hedge Funds Are Likely So Much Against Disney

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The Walt Disney Company (NYSE: DIS) has been one of the best performing Dow Jones Industrial Average stocks year to date in 2015. Disney shares were last seen up 17% so far in 2015 – and that is after a 25% gain in 2014. When 24/7 Wall St. ran its Disney Bull-Bear Outlook for 2015, the expected gain was only supposed to be about 4% and much of that was expected to be from the dividend.

What is perplexing to 24/7 Wall St. is that short selling hedge funds are not just shorting Disney. The entertainment and media powerhouse is one of the most shorted stocks at the biggest short-seller hedge funds, according to the Goldman Sachs Hedge Fund Trend Monitor. The numbers behind the short selling hedge fund reporting were not all that much of a standout. Still, these hedge funds are betting against Bob Iger’s massive success, they are betting against key franchises like the Avengers, Frozen, Star Wars, and the remaining myriad of successes that have been seen.

So, what are investors supposed to think here? It turns out that Disney has outperformed Apple Inc. (NASDAQ: AAPL) since we ran the stocks to hold for the next decade back in late 2010. This list was just updated for the Stocks to Own for the Next Decade (2015 edition). While most of those 2010 picks now have multiple alternatives for investors five years later, our view stands now that Disney quite simply has no real rival that can match its scope even if we did offer some alternatives.

The aim of this exercise is to show both sides of the coin. After all, anyone has to admit that most trends and successes cannot last forever. So, here is what the hedge funds and short sellers betting against Disney are thinking – and what the Disney bulls are thinking.

We now know that a sequel to Frozen is coming. We also have barely a half-year before the coming Star Wars film gets released. That will be the first Star Wars release under Disney, and it is likely to be one of the highest grossing movies of all-time. It may very well be the highest grossing movie of all time.

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