Netflix Inc (NFLX): Today's Most Compelling Stock Buy

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SoTM Bull's Eye Report - Today's Most Compelling Buy
Wednesday, July 3, 2013

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 Inc NFLX Internet Retail 9.9 +129.42% $206.94

Why We Like The Stock:

Netflix Inc (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 Inc (TRIP), Groupon Inc (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 Inc - Last 3 Months

  Netflix Inc - Last 12 Months

  Netflix Inc - Last 5 Years

 

 

The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of StateoftheMarkets.com and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.

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The analysis provided is based on both technical and fundamental research and is provided 'as is' without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

The information contained in our websites and StateoftheMarkets.com publications is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (HCM) a Chicago-based money management firm. HCM is registered as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM nor Ridge is registered as a broker-dealer.

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Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Technology

Referenced Stocks: GRPN , NFLX , TRIP

David Moenning


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