Mad Money

Bob Iger isn't the Lyin' King—how he pulled it off

Cramer: Disney's not a trade, it's a keepsake

Jim Cramer considers Disney to be the greatest American growth story of all time. It has gone from being a hit-or-miss stock, to the one that portfolio managers demand to have in their funds.

Before Bob Iger took over as the CEO 10 years ago, Disney was a much different story. It would have a good movie once in a while, followed by a weak movie, then strong theme park attendance followed by not so strong numbers.

Iger has now transformed the company, taking its share value to $101 from $15 in just six years. He also added tens of billions in market capitalization on top of that.

How did this CEO manage to transform Disney so quickly?

The Walt Disney Company Chairman and CEO Bob Iger
Getty Images

One word—consistency. In fact, Cramer thinks the consistency is so strong that Disney acts more like a packaged goods company than anything else. Ultimately, the consistency reduced risk for the company in creative ways. An example is when Disney made use of seamless technology that allowed the parks to efficiently handle more guests.

Iger also opportunistically took advantage of franchises to grow value. Cramer compared Disney to a packed goods company like Procter & Gamble. They are similar, except instead of selling grooming supplies and hair products, it sells Mickey, Minnie, Spiderman and the biggest one—"Frozen."

The difference between P&G and Disney? While both companies have built a reputation on franchises, P&G's growth has stalled and Disney keeps on growing. Just take a look at the Star Wars trailer; it has already been watched 123 million times!

"Disney's just got too many irons in the fire not to give it a super high, premium multiple on its earnings. Disney's franchises are too powerful, its parks too well-run, its capitalization of its characters too rigorous to bet that it's going to sputter now," said the "Mad Money" host.

Given the fact that Disney is up $7 in one day, Cramer is not willing to chase the stock at these levels. There is simply too much market volatility at the moment, and he thinks investors will have a better chance in the future.

However, the "Mad Money" host does think this is absolutely a must own stock for your portfolio.

"Remember, between now and next year when China's them park opens, this will be the stock that everyone wants to own," said Cramer.

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Cramer recommended waiting for a marketwide pullback related to Russia, China, Greece or some other sparse event before pulling the trigger.

"Consider Disney a collectible; it's not a trade it's a keepsake, it's a gift that keeps giving thanks to the hard work and insight of Bob Iger—one of the most remarkable and unpretentious executives of all time," said Cramer

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