Netflix stock surged on Tuesday after second-quarter subscriptions crushed expectations. With the media giant on top of the world, is there anything Netflix investors should worry about? Money Morning Technical Trading Specialist D.R. Barton, Jr., joins Neil Cavuto to weigh in.
Netflix stock surged on Tuesday after second-quarter subscriptions crushed expectations. With the media giant on top of the world, is there anything Netflix investors should worry about? Money Morning Technical Trading Specialist D.R. Barton, Jr., joins Neil Cavuto to weigh in.
Stock market investors celebrated the continuing economic downturn by driving stock prices higher again last week. The Dow Jones Industrial Average rose 132 points or 0.8% to 17,215.95 while the S&P 500 added 18 points or 0.9% and the Nasdaq Composite Index jumped 1.2% to 4886.69. The worse things get, the more investors believe that the Fed will delay any interest rate increase into 2016.
They are probably being too optimistic. At the rate things are going, we may not see an interest rate increase until Barack Obama leaves office. And if we do, it won't be more than a token 25 basis points that won't amount to a hill of beans.
And that probably isn't a coincidence. Mr. Obama has appointed every member of the Federal Reserve's Board of Governors. This is highly unusual. The Federal Reserve Act provides for terms of 14 years, but in the past two decades the average tenure of governors has dropped to five years. This has arguably reduced the independence of the board.
By almost any measure, Netflix, the Internet television "network" that has changed the nature of the industry, is all the rage.
After announcing blowout first-quarter revenues of nearly $1.57 billion and 4.88 million new subscribers - well above its 4.33 million guidance number - Netflix soared over 25%.
The Netflix story is a work in progress, but I see its most recent results as another chapter on the way to even more profitable opportunities going forward.
Indeed, in a moment you'll see how we can ring up a 280% profit in the Netflix "after-party"...
Netflix Inc. (NASDAQ:NFLX) has been hamstrung by ISPs like Comcast Corporation (NASDAQ:CMCSA) and Verizon Communications Inc. (NYSE:VZ), which have slowed its streaming service as a negotiating tactic, allegedly to make the company pony up money to retain the ability to serve its millions of clients. That's now over, since the Federal Communications Commission (FCC) has now sided with net neutrality.
But more importantly, there is an opportunity to exploit this legal development.
Netflix Inc. (Nasdaq: NFLX) stock climbed 13% afterhours today (Tuesday) after the company smashed Q4 earnings estimates.
NFLX reported earnings per share (EPS) of $0.72, topping analysts' predictions of $0.44.
The video streaming subscription business model that Netflix, Inc. (Nasdaq: NFLX) helped pioneer is why Wall Street is so in love with the stock, but it's also why the company is a prime acquisition target.
And while the company's $27 billion market cap would greatly narrows the list of potential suitors, the companies with the most to gain from buying Netflix also happen to be some of the wealthiest on the planet - the titans of tech.
Here’s why Netflix is so alluring, and a case by case look at each of the top four candidates…
Netflix was the best-performing stock in the S&P 500 in 2013, gaining more than 312% for the year. The good times continued into this year, with NFLX up 25% year-to-date as of March 6. But since then the stock has plunged nearly 20%.
Here's why this high-flyer has stumbled...
Netflix Inc. (Nasdaq: NFLX) stock was one of the biggest success stories of 2013 - soaring 312% - and should be reflected in Q4 earnings.
NFLX is projected to report Q4 earnings of $0.66 per share today (Wednesday), up from $0.13 last year. Revenue estimates are also optimistic at $1.17 billion for Q4. That's up 24% from 2012.
The key figure is new users. Netflix is expecting to report 2 million new subscribers for the fourth quarter. That's after adding 1.3 million new customers in the United States in the third quarter.
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Today (Tuesday), Money Morning Defense & Tech Specialist Michael A. Robinson appeared on FOX Business' "Varney & Co." to discuss whether the most interesting companies of 2013 will make for next year's best investments.
The four "interesting" companies highlighted by host Stuart Varney: Amazon.com Inc. (Nasdaq: AMZN), Netflix Inc. (Nasdaq: NFLX), Twitter Inc. (NYSE: TWTR), and Tesla Motors Inc. (Nasdaq: TSLA).
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Netflix stock has soared 440% in the past year, and 275% year-to-date. And this week the company said it added 1.3 million new U.S. customers, putting it ahead of even HBO. Yet there's this pesky $85 million gap between net income and cash flow, and now Carl Icahn has pulled out half of his investment.
Here's what all this will mean for Netflix stock in 2014...
The company recently announced it added over 2 million new domestic subscribers (at $7.99 per month) in Q4/2012. In all, NFLX ended the year with 25.47 million paid subscribers - blowing away expectations. Here's what that means for shareholders.
