Covestor model: Tactical and Opportunistic
Disclosure: Long NFLX
In June, we started a new position with 5.6% of our portfolio in Netflix (NFLX) at $63.50. Netflix has fallen from grace as the company made decisions last year that shareholders did not agree with. But they are a progressive company. They started with mailing DVDs in the mail and moved into streaming.
Last year they wanted to split the DVD and streaming services, but the company recanted after it became clear the market wasn’t ready for that kind of move. Since then the stock has fallen and been recently trading in the $60 dollar per share range.
This year Netflix is releasing original programing, another sign of their flexibility and willingness to innovate. While not all their decisions are always good ones, the company continues to evolve and change the market landscape.
Netflix changed the rental environment when they started mailing DVDs, evolved and outlasted companies like Blockbuster when they moved into streaming. Though they are committed to moving into original programming, it might be a little early to invest in Netflix. We will have to wait a few quarters to see how well their new strategy works.