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  • Is Intel Inside Your Portfolio? [View article]
    while we didn't recommend Intel at 19, it is still cheap at these levels, given its growth, multiple, and dividend
    Nov 2 12:08 PM | Likes Like |Link to Comment
  • Is Intel Inside Your Portfolio? [View article]
    thank you for the compliment. while we do wish for a more meaningful presence in the mobile sector, we think that one way or another, INTC will find a way to generate even more profits from the sector (in addition to servers)
    Nov 1 02:24 PM | 1 Like Like |Link to Comment
  • Wells Fargo: Buy A Bank Truly Focused on Banking [View article]
    we tend to think of WFC as a super-sized regional bank that competes with the other members of the Big 4. the closure of the IPB unit should not hurt the company long-term
    Oct 31 08:32 PM | 1 Like Like |Link to Comment
  • Netflix Crisis Abates, Future Is Promising [View article]
    seems like we'll have to wait till Q4 results are released to find out the true value. NFLX bears cannot condemn the company for having a lack of quality content and for trying to acquire more content. NFLX is doing what is necessary to both retain and attract more customers, both here and internationally.
    Oct 31 03:55 PM | Likes Like |Link to Comment
  • Netflix Crisis Abates, Future Is Promising [View article]
    time will tell. the easy "short" money has been made in the stock, just as the easy "long" money has been. the stocks prospects, for both shorts and longs, are much different at around $80 then at $200-$300. we shall see what happens in Q4 and the first few quarters of 2012. it will be key to watch not only COGS, but cash flow going forward as well
    Oct 31 02:45 PM | Likes Like |Link to Comment
  • Netflix: The Real Problem With Its Business Model [View article]
    a thoughtful article, however we would like to bring up the idea that NFLX's content cannot possibly have the right content for every customer. It is indeed a matter of quantity vs. quality, and it is not effectively possible to have both. HBO has far less content, but no one will argue the quality of it. Netflix, on the other hand, has vastly more content, making it appeal to a wider cross-section of customers. There is no effective way for the company to offer enough content to please every customer, yet the expanding revenues derived from subscriber growth will allow the company to slowly but surely expand its library, pleasing increasing amounts of customers
    Oct 31 01:59 PM | Likes Like |Link to Comment
  • Netflix Crisis Abates, Future Is Promising [View article]
    but to assume revenue growth will not pick up in Q4 and beyond is also a mistake. this was a transition quarter for the company, and revenue growth should re-accelerate in Q4 and the years to come
    Oct 31 01:14 PM | Likes Like |Link to Comment
  • Netflix Crisis Abates, Future Is Promising [View article]
    the losses projected in 2012 are not due to growth in streaming costs, they are due to the costs of expansion into these new markets, which, if everything goes according to plan, will provide NFLX with exactly the kind of revenue growth it needs
    Oct 31 12:18 PM | Likes Like |Link to Comment
  • Netflix Crisis Abates, Future Is Promising [View article]
    but we are talking about revenues, not operating losses. the company needs revenues to cover its streaming obligations, not EPS.

    the international launch in canada has shown that it does take financial resources to launch into a new market. the costs of UK & Ireland expansion, coupled with Latin America will result in at least some losses in 2012. but that is what the company needs for long-term growth and success.
    Oct 31 02:26 AM | Likes Like |Link to Comment
  • Netflix Crisis Abates, Future Is Promising [View article]
    the revenues are indeed growing, they just didnt match the expectations needed to keep the stock at overvalued levels. even with the reset expectations and guidance, NFLX revenues should see levels sufficient to pay the company's streaming costs
    Oct 31 02:02 AM | 1 Like Like |Link to Comment
  • Netflix Crisis Abates, Future Is Promising [View article]
    One fact the shorts often overlook is that the majority of the costs on the balance sheet are there to pay off the off-balance sheet streaming obligations. the streaming obligations are no doubt large, no one is debating that. but they are already included in the income and cash flow statements.

    These streaming costs are not true debt, because for that to be the case, the COGS (cost of goods sold) must be $0, and that is precisely where streaming costs flow through. these streaming deals are essentially Netflix's inventory, and it is paid for by revenue, not its cash or income. Even if you assume NFLX will not grow revenues ever again, they will bring in $3.196 billion in revenue on an annualized basis if you use Q3 results. for revenue to not be able to cover the streaming costs, subscriber losses would have to be dramatically larger than what has occurred.
    Oct 31 01:41 AM | 1 Like Like |Link to Comment
  • Netflix Crisis Abates, Future Is Promising [View article]
    Netflix has the subscribers, and its brand, despite the obvious damage, still resonates with consumers. the "competitors" to Netflix do not have the same brand appeal, or business model. (although if Apple were to change iTunes video into a subscription model, that would put serious pressure on Netflix.)

    NFLX still offers the most compelling value, and subscriber growth should resume by december. however, it is important to change your investment thesis if the facts change, and we will be eagerly awaiting Q4 results sometime in january, to see if subscriber growth has indeed resumed. if it does not resume, then we will withdraw our reccommendation on NFLX, because for now, subscriber growth, both domestically and internationally is what is fueling the company.
    Oct 31 12:55 AM | Likes Like |Link to Comment
  • Netflix Crisis Abates, Future Is Promising [View article]
    the thing that the bears often overlook is the one of Netflix's importance to the studios. The one similarity that Netflix shares with blockbuster is that at the end of the day, the studios depend on it for a continued source of profits. Netflix has shown that it is the only company capable of effectively monetizing studio content. without Netflix, studios lose a large source of revenue. the financial data around Netflix is indeed crucial, because the company must walk a very fine line going forward.

    In situations like Netflix, it is important to not only analyze the numbers of a company, but the dynamics of the industry as well. just as Microsoft bulls point to its valuation, balance sheet, and a host of other metrics showing the stock is cheap, they fail to see the structural long-term issues facing the company. With Netflix, the company's long-term issues are mitigated by several key factors. the dynamics of the industry cannot be ignored. The studios need Netflix to survive to ensure a continued stream of content revenue, and they have no real incentive to abandon the company.
    Oct 30 11:21 PM | 1 Like Like |Link to Comment
  • Netflix Crisis Abates, Future Is Promising [View article]
    the shorts have been constantly arguing that the competition would destroy netflix, but no credible competitors have materialized. Netflix is the leader in its industry, and will continue to be for the forseeable future.

    as for insider selling, the consistency of Hasting's selling makes it seem as if he is diversifying his financial assets. he sells stock like clockwork, regardless of the price or company developments.

    this article on NFLX insider selling, penned by Rocco Pendola, one of most vocal NFLX shorts (to be fair, we admire him for his conviction and must note the fact that he has indeed been right as of now, goven the stock is about 70% off its highs.) in the article, he states that "I am inclined to have no issue with Hastings' divestitures. I would be a complete liar if I said I would not do the same thing. Most of us would jump at the chance to bank, trust, donate -- whatever Hastings does with it -- over a million bucks a week."

    http://seekingalpha.co...

    while other executives have also sold stock, it would be difficult to find a company whose stock price climbed so rapidly without executives who sold large amounts of stock. Perhaps that should have served as a red flag to investors. But the stock is now in an entirely different class. the fundamental question that needs to be answered is whether NFLX is a broken stock, or a broken company. and we think it is a broken stock, but not for as long as the bears may think.
    Oct 30 05:38 AM | 1 Like Like |Link to Comment
  • Netflix Crisis Abates, Future Is Promising [View article]
    in 2004, when those changes were put into place, reaction was very similar to now. many predicted the collapse of the company. yet the company was able to innovate its way through that crisis, and we think that it will do so this time. the similarities to that period reflect the sentiment surrounding the company. Netflix knew that streaming was the future of the company since around 2004-2005, and have been preparing since then for a streaming only future.
    Oct 30 05:26 AM | 1 Like Like |Link to Comment
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