The stock of Walt Disney Co (NYSE:DIS) has reached a 52-week high, but Jim Cramer has advised investors to be cautious.
What Happened: On Tuesday, Cramer, the host of CNBC's "Mad Money," suggested that it might be time to trim Disney's stock, reported CNBC. The stock has surged by 25% this year but Cramer believes that the reasons behind this rally are questionable.
Disney is currently embroiled in a proxy battle with activist investor Nelson Peltz, who has been critical of the company's management. Despite the stock's recent gains, Cramer is skeptical about the sustainability of this growth.
"I don't want talk. I want action," Cramer said.
"Trimming on strength makes a lot of sense."
Why It Matters: The activist battle against Disney has been ongoing for over a year and has recently intensified. Peltz, the activist investor, has been pushing for changes in Disney's management, including his own nomination and that of another candidate.
Disney's CEO, Bob Iger, recently announced the cancellation of several projects in response to a box office slump, as part of a studio overhaul. This move is part of Disney's efforts to revitalize its film slate.
However, Cramer's recent advice to trim Disney's stock suggests that there may be lingering concerns about the company's future performance, despite these efforts.
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