The biggest gainer in S&P 500 in 2013!

Netflix exceeded most of the expectations yesterday with their business model for streaming tv and film service. In the third quarter, they added 1,3 million streaming subscribers in the U.S and that is the highest ever.

It`s funny to think about. Ten years ago, Netflix delivered the films only through DVD`s mailed to the customers, which made them the highest-performing stock on Nasdaq. Now the business model is totally different and more profitable.

Netflix is big in the U.S, but are growing outside of the country. They have a new agreement with Virgin and so far they have added 1,4 million subscribers for a total of 9,2 million. Investors are impressed and sent the stock up to $390 in after-hours trading. That`s 10%.

History tells us that this can be a very volatile stock. In 2003 Netflix was the highest performing stock on Nasdaq. They had solid results compounded by momentum. Now, they say it feels like 2003 euforia.

Despite the huge swings in the stock price since 2002 IPO ($8 down to $3 to $39 to $300 to $55 to $330) they continued to grow the membership every year fairly steadily. What they have made over the last 10 years is stunning. Netflix say they want to make the next 10 years remarkable. Earnings-per-share is 52 cents and the net income for the quarter reached $32 million and that is up from $8 million in 2012.

Investors paid close attentions to the number of subscribers because they have predicted that they could have 60 million to 90 million members in the U.S, and even more overseas. Yesterday, Mr. Reed Hastings (CEO), who frequently singles out HBO as the main competitor, hinted at a specific number it`s aiming for.

They have a long way to go to match HBO`s 114 million global member count. Mr. Hastings also talked about Netflix`s tv show like «House of Cards,» and the new and bigger hit «Orange is the New Black.» Mr. Reed Hasings (CEO) says that «Orange» will end the year as Netflix`s most-watched original series ever. The typical Netflix subscriber still spends a lot of time streaming repeats of TV shows.

More than 25% of the companies on S&P 500 are comming with their earnings report this week. Yesterday, I was looking for the earning from Netflix. The stock have soared this year and few investors expect the stock to pull back following its results on monday.

People want to see films. Watch movies and TV shows. They don`t want to spend money on burgers. McDonald’s fell 0,8% to $94,42. They warned global October sales could be flat. Apple rose 2,5% to a shareprice of $521,83 and was the largest winner on Nasdaq.

Guidance for Apple numbers from September 23 told us that it is sold over nine million iPhone 5cs and 5s`s in their first three days (SEC 8-K filing). Apple`s guidance results in EPS is between $7,23 and $8,09 for september quarter.

It is expected to see a revenue of $37,5 billions. Up 4,3%, which is above the guidence of $37 billion. Iphone should be over 50% of revenue and 65% of profits. I think the future is in the hi tech now. The tablet sale is just in the beginning of a new era. I look forward to Apple`s earnings report.

News today: Non-Farm Employment Change/Unemployment Rate at 8:30am.

Reed Hastings

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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