NFLX

Netflix Subscriber Growth Slows While Profitability Shrinks

by

Maligned DVD rental and video content streaming service Netflix (click ticker for report: ) reported third quarter results that were a little better than expected, but overall, not incredibly strong. Revenue grew 10% year-over-year to $905 million, roughly in-line with consensus estimates. Earnings tumbled, falling 89% year-over-year to $0.13 per share—significantly higher than consensus estimates but still not a great number, in our view. While we enjoyed CEO Reed Hastings candid letter to shareholders with regards to the business outlook, he pointed out several weaknesses. Domestic streaming subscriber additions are estimated to be 4.7 million-5.4 million, much lighter than the firm’s previous guidance of 7 million. Hastings pointed to several metrics, including 30%+ growth in per-member viewing that suggests consumers … Read more

Netflix Takes a Dive, Down 35%!

by

Click below to view our “absurdly overvalued” call on Netflix when the stock was trading around $250 per share: http://seekingalpha.com/article/281777-netflix-s-valuation-completely-absurd-significantly-overvalued << Learn More About Our DCF Valuation Model Template

ICYMI — Podcast: 2nd Annual Nelson Exclusive Yearly Round Up Call

by

Tune in to President of Investment Research Brian Nelson’s Exclusive Yearly Roundup Call. Ladies and gentlemen, Thank you for joining us on our second annual Nelson Exclusive roundup call. I appreciate your interest very much, and I appreciate your attention even more. Just an important reminder, Valuentum is an information provider, not a broker or financial advisor, and we do not issue recommendations of any kind. With that said, let’s get started. These are the best of times. We have now surpassed the 9-year mark since the March 2009 panic bottom that sent shudders through the global financial system, and the US economy is as strong as it has ever been. US gross domestic product is now approaching $20 trillion … Read more

How to Think About Corporate Tax Reform

by

There Is Milk At The Store

by

This article first appeared in the September edition of the High Yield Dividend Newsletter. For more information about this publication, please see here. “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” — Winston Churchill By Brian Nelson, CFA Very few of us could have imagined that we’d witness the bull market that began on that fateful day in March 2009 that might very well mark a generational low. In 2009, major investment banks around the globe were struggling to survive, and the fallout in the mortgage markets left the banks holding paper that nobody wanted to own, let alone buy. The global financial system … Read more

Economic Roundtable: Quant Quake, Quac-cidental Correlation

by

Image Source: Anders Sandberg.  Last week, the markets may have revealed that internals aren’t all that healthy. Major equity markets experienced a “rotation” that reminded many investors of the “quant quake” from August 2007. As Valuentum’s Brian Nelson wrote in Value Trap, “just a few bad days in the market caused a rapid unwinding of many quant long-short strategies (back then). Goldman’s chief financial officer said at the time that the firm was witnessing ‘25-standard deviation moves, several days in a row.’” On the surface, markets last week seemed relatively calm, but as the episode in 2007 revealed the activity last week may just be the calm before the storm. Many are pointing to overcrowded trades in betting against certain … Read more

2,350-2,750 on the S&P? Could the Coronavirus Catalyze a Financial Crisis?

by

Image: We think a rather modest sell-off in the market to the target range of 2,350-2,750 on the S&P 500 is rather reasonable in the wake of one of the biggest economic shocks since the Global Financial Crisis. The chart above shows how far markets have advanced since 2011, and an adjustment lower to the target range of 2,350-2,750 is rather modest in such a context and would only bring markets to late 2018 levels (note red box as the target range). The range reflects ~16x S&P 500 12-month forward earnings estimates, as of February 14, adjusted down 10% due to COVID-19. When companies like Visa talk about a couple percentage points taken off of growth rates, one knows that … Read more