This red head bombshell is 19 and hitting the clubs 7 nights a week.
Ms. Netflix, her stamina is unbeatable. After missing a 40% move on January 28th by 2 days, I have been waiting 5 months for a decent pull back to start my position. Maybe the flash crash on May 6th, 2010, the biggest Dow one-day drop in history? No, NFLX only dropped 2%! How about the worst May since 1940 in the market? Netflix GAINED 12%. Amazing! It looks like she’s stepping off the dance floor for a quick breather, and I’m starting my position @ $115.75, after a 6% pullback. At a current P/E of 50, a F P/E of 30, this is one expensive stock. However, with a growth rate of 30%, that gives it a PEG of 1.7. If it’s below 2, it’s growing fast enough to justify the high multiple. Only a 2 star CAPS rating, but I think they’re wrong.
This stock is ignoring the market because things have never been better for Netflix. 3 million iPads were sold in 80 days, and Netflix is the #1 app for the iPad. Wii (50 million users) support just started. PS3s (25 million users) and Xboxes (30 million users) are just starting to use Netflix. Netflix is spending to increase their on-demand library, preparing for the future. With “only” 14 million subscribers, there is a massive amount of growth potential. If Netflix’s subscribers were to quadruple, that would still be only half of the gamers out there. NFLX is currently valued close to Blockbuster’s 2002 prime, with a market cap of 5.6 billion. This concerns me, but with no retail space, and a rock solid income stream subscription model, I can see Netflix easily hitting 10 billion within the next 5 years.
Hopefully this stock will cut in half within the next year, so I can buy more. But, I learned my lesson after missing a 120% move while waiting for a hangover that never came. It’s Friday night and I’m buying the next round of shots!
Monty
P.S. I also doubled-down on our JPM position @ $38.54 and I posted our entire portfolio here:
Greedy When Fearful 
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