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Sign in / Join NowSummaryDisney sent a shockwave through the media industry on Tuesday when it announced it would pull its movies from Netflix.Both stocks dropped in the aftermath of the announcement, but their outlooks couldn't be more different.Disney looks like a great value at the current price, while Netflix could be at the beginning of a significant correction.Disney (DIS) sent a shockwave through the media industry on Tuesday when it announced it would pull its movies from Netflix (NFLX) and start two streaming services one for ESPN and one for Disney/Pixar content over the next two years. As part of this move, Disney is investing an additional $1.6 billion to take controlling ownership of BAMTech, the company behind the streaming services of HBO, MLB, and NHL.We raised the possibility of Disney creating a standalone streaming service in our original long idea on the stock, and this development only furthers our conviction that the company can continue to monetize its content in a changing media market.At the same time, the loss of Disney's movies continues the trend for Netflix that we first identified over a year ago in our article "The Spell Is Broken: Netflix Is More Like A Traditional TV Network." Netflix's first mover advantage in the streaming video world is on the decline, and the fundamental outlook of the company does not justify its premium valuation.Both stocks dropped in the aftermath of the announcement, but their outlooks couldn't be more different. Disney looks like a great value at the current price, while Netflix could be at the beginning of a significant correction.

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