The Mid-Cap Fundamentals model managed by John Ballard is a long-term model that holds the best companies within under-capitalized sectors. Recently, Ballard added Netflix Inc (NASDAQ: NFLX) to the model. NFLX has a high price to earnings ratio compared to peers, but the company has basically no competition in the mail-order video rental sector, unless you consider beleaguered mail-order video rental company Blockbuster Inc (Pink OTC Markets Inc: BLOAQ) as a serious competitor. Many companies are stepping forward to compete in online video streaming services, including Amazon.com Inc (NASDAQ: AMZN) who now has streaming video rentals. NFLX’s sales have been growing, increasing from $1.2 billion in 2007 to $1.4 billion in 2008 and $1.7 billion in 2009. 2010 looks like it will be a banner year for sales since by quarter three 2010 the company had already reported $1.6 billion in sales for the year. It is important to note that the company’s total liabilities have also been increasing, rising from $248.4 million in 2008 to $464.6 million in 2009, then to $559.1 million in quarter three 2010.
In the Performance with Protection model managed by Leif Erikson, the goal is to outperform the market through long-term investing all while protecting capital. Erikson pays attention to macro trends and uses a top-down fundamental approach. Recently he added Intel Corporation (NASDAQ: INTC) to the model. INTC has yet to enter the tablet arena, but they plan to create a chip that makes tablets more powerful and extends battery life. As has been exhibited by Apple Inc’s (NASDAQ: AAPL) iPad sales, the tablet market is definitely very large. The company’s sales had been declining—falling from $37.6 billion in 2008 to $35.1 billion in 2009, but in 2010 by quarter three, the company had already reported over $32 billion in sales.
