Netflix revenue up +27%

Netflix will plunge today. Down about 25%. Investors are disappointed because of their subscriber growth. That said, Netflix have always been a volatile stock.

netflix-logo

They reported Q3 EPS of $0,96 and they beat consensus by $0,03. Revenue was up +27% y/y to $1,41 billion, and hit investors estimate. They have a total paid member base of 50,65 million, and that is up +33% y/y. Free cash is down to -$74 million on higher investments.

They failed in Q3 with 3,02 million subscribers and that`s below its estimated 3,69 million. Netflix reported profits of $59,3 million, and that`s better than last years Q3 at $48,4 million.

Investors do not think that Netflix will reach their membership growth goals because they have raised prices for their new members, but earlier this year Netflix said they added 1,7 million members and that`s better than expected.

Netflix says it will add 4 million new members in fourth quarter as they have launched their service in Europe led by Germany and France. They will start streaming of all 10 seasons of Friends, and belive HBO is their biggest competitor, but they have different programs and shows.

A drop like this is a great opportunity.

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Earnings focus

Investors are waiting for earnings this week and today big earnings announcements are coming from Bank of America, BlackRock, American Express, eBay and Netflix. They will all report after the close later today.

What`s happening in the market is a change. Investors move from one sector to another. Investors are not buying everything like last year any more. Take a look at Best Buy. Tripled in 2013, but plunged over 40% at the beginning of 2014. The stock in down 62% from the top, and struggle to bounce back. Stay away from stocks like that.

I see a new bull market starting right now. That`s why it is very important to jump in now, because it will probably be too late at the end of the year.

Jump out of stock without rock-solid fundamentals and buy high-quality stocks with solid fundamentals. Like that, the money will just rotate. The new bull stocks will not be hammered as hard as the crock stocks. They will rather take off right now.

Money will always be on the move and will always flow towards its best and safest returns. Take a look at the dollar. It`s going straight up. At the same time, the fear have doubled. Other quality blue-chip stocks will report later this week. Stocks are plummeting today. Is it emotions or fundamentals?

I`m very excited about the rest of the year and the beginning of 2015. New bull markets starts right now.

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Airlines hammered

Many investors are scared right now as it is time for Halloween soon, but Halloween is not the reason. It`s something worse; the stock market.  S&P 500 and Nasdaq had their worst weeks since May 2012, but I don`t think it is a big surprise for someone in the market as this is highly expected.

AA

Russel 2000 is in a correction territory and DJIA has dropped down about 200 points in four days in a row, and that has not happened in years. Last time we saw volatility like this was in 2011. Equities are a scary thing for investors right now, and that is not because of the coming Halloween.

S&P 500 ended at around the 200 MA and that will be a very important level to watch for in the coming days/weeks. SPX declined 3,1% last week and are now trading 5,6% below its peak of 2019,26 a month ago.

Many sectors are starting to be oversold and this is a good opportunity for many to pick up stocks. Take a look at the oil price, which is declining every day now, trading below $90. The surplus for many in this oil sector is good, so they don`t complain with a price below $90, despite an break-even at $92.

Other sectors will benefit from the declining oil price. American Airlines will benefit from reduced fuel costs and the stock looks cheap. Fuel is the largest expense line for American Airlines and a decline in oil prices will have a huge impact to their bottom line.

On December last year, AMR Corp merged with U.S Airways. They are now the world`s largest airline; American Airlines Group (AAL). The shares doubled since they merged, but the stock have had a pullback which makes it interesting for investors as the fuel cost are making it more profitable.

AAL has delivered great results, have good cash flow levels and their revenue are increasing. They have high-capacity and a strong pricing power, and are expanding its network to China. Those routes is one of the most profitable routes worldwide and they will start to compete with Chinese airlines.

With around $10 billion in cash and possible buyback program, the earnings per share will increase to new highs. The forecast for earnings is $5,21 per share, and with a buyback program, this stock looks undervalued, and EPS would strengthen.

The stock slid -7,15% yesterday and looks cheaper and cheaper every day. Another airline stock to decline was United Continental Airlines (UAL), down 7,29% yesterday. The market trend indicator gave us a bearish reading on stocks and that`s for the first time in some time. If we fall below 1,800 on the S&P 500, the war will be over and the bears are the winners. What  investors are doing now, is jumping from one sector to another.

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Rock`n Roll in the stock market. Fundamentals or Emotions?

Are stock markets falling because of the fundamentals or investors emotions? The one that is first to sell stocks is the small investors. You can see that if you look at the small cap index like Russel 2000. They started the downturn long time before S&P, Dow and Nasdaq.

SPX 13 October 2014

(Picture: S&P 500 Index)

The big ones are selling later, if they are selling at all? Big investors like Buffet and Icahn are holding their positions and pick up the stocks when it drops down. So are the big hedgefunds. This is simply because they have money, time and look at the fundamentals.

Apple Inc is now trading at around $100, and Icahn said last week that the stock is worth about $200. Of course he is not selling stocks. As an activist investor, Icahn have written a letter to Apple`s CEO Tim Cook.

Icahn told him to go for buybacks. Apple will launch their new Apple Pay in a few days, and that`s probably why Icahn is so positive on that stock right now. The big player will win, and the small one with bad nerves will lose, because the small one don`t know when to jump in again.

I think that many investors don`t understand the Apple hype, but I will not be surprised it Apple beats the 51,03M bar Apple have set for itself this year. The holiday season will take the level higher.

The Dow suffered last week and Nasdaq were particularly hard hit, down 2,33% on friday. The fear Index tells us that investors are terrified at the moment. Investors didn`t like the new data from Germany and Japan, and don`t know what to do about Fed`s plans to end its stimulus and their low-interest rate policies. This is why the market is volatile right now.

Big players are looking at the fundamentals. I think they will look for the biggest companies in the U.S, and third quarter earnings reports will come from Netflix and eBay on Wednesday. Google will come with their report on thursday. In addition; Chrysler will make its debut on the New York Stock Exchange.

It is when the big players start to sell that the stock market crash, and they are not selling right now. They are waiting. Swiss adviser Marc Faber has talked about a crash for over a year now. He says that we are in a gigantic financial asset bubble. Anyway; your strategy shouldn`t be to buy on top and sell at the bottom, so be cautious.

Right now, it`s all in a green territory in Europe. Buffet is buying stocks this week, and JP Morgan is bullish and say they don`t expect the market to drop down 10%. Trade what you see, not what you think. The market is volatile and will continue to be so for a while.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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October 2014

Shiny bull will be back on Monday 13 October.

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