Nasdaq OMX Group Inc.
) announced the inclusion of a leading Internet television
) to its Global Index group. Effective Jun 6, this non-financial
stock will be part of the Nasdaq-100 index, which is a premium
global index including non-financial securities based on the
Nasdaq-100 index comprises the companies of the core trade
sector such as computer hardware & software,
telecommunications, retail & wholesale trade and
biotechnology. These companies are based out of the US and other
international countries. Likewise, Netflix will also be a part of
the Nasdaq-100 Equal Weighted index (NDXE) and the Nasdaq-100
Ex-Technology Sector index (NDXX).
Netflix a Worthy Pick for Nasdaq-100
Based out of the US, Netflix enjoys a dominant position in the
Internet television space with a market capitalization of $12.5
billion. The company is a leading provider of television shows
and movies on televisions, computer or other mobile devices both
in the US and internationally. Netflix' strong margins growth
over the past several quarters complements its robust outlook,
Even the shares of Netflix are maintaining a rising trend.
Yesterday's closing price represents a strong one-year return of
about 217.1% and a year-to-date return of about 149.3%. The
Nasdaq index jumped 23.0% and 17.9%, respectively during the same
Apart from a history of outperforming estimates and strong
financial results, Netflix's strong growth momentum is also
depicted by the positive estimate revisions that the company has
been experiencing thus far.
Following the release of the first-quarter results, the Zacks
Consensus Estimate for 2013 surged 34.5% to $1.60 per share in
the last 60 days. Moreover, the Zacks Consensus Estimate for 2014
rose 13.7% to $3.08 a share during the same period. Given the
healthy upward estimate revisions for both 2013 and 2014, Netflix
warrants a Zacks #2 (Buy).
Nasdaq Growing Through Diversification
On the other hand, Nasdaq's consistent focus on growing its
non-transaction base revenues elucidates the company's strategy
of diversification to ease the competitive pressure in the global
market. As such, Nasdaq's organic growth is being helped by the
steady market data and technologyas well as issuer and access
services revenues primarily due to the increased deliveries of
contracts and greater demand for co-location services.
The Nasdaq-100 index is also a part of the company's Global
Market index, which is a primary contributor to the issuer
services. Early this week, Nasdaq also received an approval to
launch its new interest rate derivative trading platform - Nasdaq
NLX. This further underscores the company's strategic move to
attain a competitive edge in Europe.
While Nasdaq carries a Zacks Rank #3 (hold), we maintain a
positive stance on Netflix in the near term. Meanwhile, other
stocks in the non-financial sector that are outperforming include
AVG Technologies NV
), both of which carry a Zacks Rank #1 (Strong Buy).
AVG TECHNOLOGS (AVG): Free Stock Analysis
DTS INC (DTSI): Free Stock Analysis Report
NASDAQ OMX GRP (NDAQ): Free Stock Analysis
NETFLIX INC (NFLX): Free Stock Analysis
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