Greg Abel inherits $359 billion in Berkshire Hathaway (NYSE: BRKA, BRKB) cash and a restored net buying posture, yet the conglomerate has passed on Walt Disney (NYSE: DIS) even as shares sit 46% below their peak as of August 28. The case for Disney is legible. What complicates it is equally legible, and neither side has moved Berkshire's hand.
The case for a position
Berkshire's second-quarter reversal is the starting point. After a multi-year streak of selling stocks on net, a pattern that began in the fourth quarter of 2022, the company spent $20 billion on equities in the three months ended June 30. The most notable move: adding to its Alphabet position, lifting that stake to third-largest in the portfolio. The buying resumed.
Disney looks like it fits that set. Its shares trade at a forward price-to-earnings ratio of 14.3, against a forward P/E of 21 for the S&P 500. Finding something cheaper than the broad index is genuinely the challenge in today's market. On the moat question, Disney's intellectual property is impossible for rivals to replicate regardless of capital spent. Earnings are also moving. Adjusted EPS rose 19% in fiscal 2025 versus the prior year, and management expects double-digit growth again in fiscal 2026.
The counterargument
The counterargument is structural, not cyclical. Disney operates a large linear-television business anchored by ABC and ESPN. Streaming's secular pull has bled that segment of subscribers and advertising revenue, and the pace of deterioration is genuinely hard to forecast. That kind of uncertainty is precisely what Abel would want to avoid. The streaming side offers some offset: Disney+ and Hulu together counted more than 190 million combined subscribers as of September last year, and the segment has turned profitable at scale. But competitive pressure is real. Even Netflix, the dominant platform, is watching its own growth decelerate. For Abel, Disney may simply fall into the "too hard" pile.
On balance, the numbers favoring Disney have been on the tape for some time. The forward P/E has been low. The cash balance at Berkshire has been massive. The stock has kept declining without a Berkshire position following. The read-through from Q2 is that Abel is willing to deploy capital selectively, not that Disney is next in line. The line to watch is whether a second consecutive net-buying quarter narrows the field toward names with cleaner structural profiles. At 14.3 times forward earnings and 46% off its high, Walt Disney is the obvious value candidate. It also remains unbought.