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Old 09-20-2011, 06:59 PM   Nav to Top  #1
Vinnystocktips
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Money Buying Netflix

Today I started buying Netflix at the end of day when the market was selling off and the stock was down another 10% today trading at a new 52 week low of $129. I got in at $130. Buying Netflix in my opinion is a steal right now for the next 12 months. Could it go down a bit further? Sure. However, I do not think it can go past $120 a share which is its 1000 day moving average. Like I have said, I do not think I am any where near a professional technician, but I know that should be a good support level in this stocks quick decline this year. I figured after today's declines that buying Netflix is a good idea. I sold some of my GMCR to pick up the discounted streaming movie company. I started with a half a position today and if it goes down another 10 points, I will buy more. I also purchased a lot of the January 2012 $240 calls to leverage the position if it does bounce back strong. In a recent article (http://www.vinnystocktips.com/2011/0...e-more-upside/) I said Coinstar was a better play than Netflix, but that was 40-50 points ago and now I feel Netflix is the better stock.

http://www.vinnystocktips.com/2011/0...uying-netflix/

Selling out of GMCR and buying Netflix was a pretty easy decision based on the company's valuations now. The company will get its growth back because management will realize that it acted pretty silly by aggressively raising prices. In the industry they are in customers have many alternative ways to rent movies so the last thing management wants to do is piss off their customers. This is exactly what they did, and the stock price was punished because of it. Now lets look at the positives of what the fundamentals have which points out why I am buying Netflix. The company is only focused on North America and recently announced it was going to penetrate Latin America and Europe which should keep growth high for a few years at least. This in itself is a reason to be buying Netflix. But now its valuations have come down drastically. It trades at under 3 times revenue and given mediocre future growth rates, the PEG ratio is very low again which is my biggest sign to buy growth names. These valuations alone make the name attractive, but there are more signs that buying Netflix is a good counter-intuitive idea. The company has a big customer list that many companies would like and because the company now has a market capitalization under $7 billion it becomes an acquisition target to some big tech companies like Google or Apple which could leverage the subscriptions and online streaming for its platforms.

What I would love to see is some sort of management shake up. This would signal to investors that the board realizes they screwed up and are learning from their mistakes. This would be a very bullish sign in my opinion. The company is going to bounce back, its business model is too good and it is expanding internationally which signals years of growth! All of this points to investors buying Netflix again!

In news other today, the couple companies that reported which I said to listen to all had solid quarters. Their stock prices didn't all go up, but I thought the quarters were solid. Autozone continued its 12% growth. Adobe and Oracle posted solid quarters with Adobe going up and Oracle staying flat. I feel Oracle is the better play of the two. Lastly, Carnival Cruise Lines had a great quarter showing that families were still spending money on vacations which is a good sign that the economies are just not as bad as everyone makes them out to be.

Use sell offs like yesterday and end of day today to pick up names on your shopping list cheaper. That is exactly what I did today when I started buying Netflix right before the close.

Good luck,

Vinny
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Old 02-13-2018, 07:39 AM   Nav to Top  #2
Jackwalker
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Netflix is up by 3.40%. Check, track & analyze how the other FAANG stocks performance at one click to make better investment decisions
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Old 02-13-2018, 07:45 AM   Nav to Top  #3
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Netflix is up by 3.40%. Check, track & analyze Netflix, how the stock is performing with competitors analysis to make better investment decisions
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