Bull’s Eye Report: Netflix (NFLX)

This king of Internet retail stocks is gearing up for a jump.

   

At StateoftheMarkets.com, we strive to “own the best and ignore the rest” in our equity portfolios. Toward this end, each day we search our database for a “top stock” (a top rated company in terms of earnings strength as well as company and industry performance) that presents a strong technical “set up” and a good entry point.

In short, when our equity team is looking to add a stock to one of our portfolios, the “bull’s eye” stock shown below is generally their first choice.

Company Symbol Industry Stock Rating YTD% Gain S.T.
Stop Loss
Netflix NFLX Internet Retail 9.9 +129.42% $206.94


Why We Like The Stock:

Netflix (NFLX) is our most compelling buy today due to the fact that it is a top rated stock (in terms of earnings strength and company/industry performance) with a positive technical set-up. Internet Retail stocks are one of the strongest sub-industries, as evidenced by great charts like TripAdvisor (TRIP), Groupon (GRPN), and NFLX. While NFLX has already posted triple digit returns this year, we won’t let that dissuade us considering it for a short-term trade. NFLX’s turnaround is mostly due to its amazing turnaround late last year after making drastic changes to its business model.

The stock recently traded north of $240, which gives it some upside in the short-term. Historically, NFLX has traded just over $300 in July of 2011, so both short- and long-term prospects indicate that this stock has room to run. NFLX is currently sitting on its 50-day moving average after crossing above its major short-term moving averages on Monday. We like the stock at current prices for a run back to $240 as long as it can hold its current range (stop at $206.94).

We Would Be Buyers:

At the current price (~$220).

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Company Profile:

Netflix, Inc. (Netflix), incorporated on August 29, 1997, is an Internet subscription service streaming television shows and movies. The Company’s subscribers can watch unlimited television shows and movies streamed over the Internet to their televisions, computers and mobile devices, and in the United States, subscribers can also receive digital versatile discs (DVDs) delivered to their homes. The Company operates in three segments: Domestic streaming, International streaming and Domestic DVD. The Company obtains content from various studios and other content providers through fixed-fee licenses, revenue sharing agreements and direct purchases. The Company markets its service through various channels, including online advertising, broad-based media, such as television and radio, as well as various partnerships. In October 2012, the Company launched its streaming service in Finland, Denmark, Sweden and Norway.

Stock Rating:

The Stock Rating indicates the combined score of our proprietary Earning Strength and Company Performance models. The rating scale is 0 – 10 with 10 being the highest.

Disclosure:

At the time of publication the editor and affiliated companies own the following positions: NFLX

Note: Positions may be bought or sold while this publication is in circulation without notice.

 

Netflix – Last 3 Months

 Bulls Eye Report: Netflix (NFLX)

Netflix – Last 12 Months

 Bulls Eye Report: Netflix (NFLX)

Netflix – Last 5 Years

 Bulls Eye Report: Netflix (NFLX)


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