Visitors Now:
Total Visits:
Total Stories:
Profile image
By The Daily Reckoning (Reporter)
Contributor profile | More stories
Story Views

Now:
Last Hour:
Last 24 Hours:
Total:

How to “Stream” a 20% Profit Today

Tuesday, October 18, 2016 7:33
% of readers think this story is Fact. Add your two cents.

(Before It's News)

This post How to “Stream” a 20% Profit Today appeared first on Daily Reckoning.

October has been a difficult month for traders.

Breakouts aren’t sticking. Our favorite “risk-on” sectors are beginning to lag the major averages. Overall, bullish trading signals are scarce.

But that doesn’t mean we can’t book market-beating, double-digit gains.

While doom and gloom dominate Wall Street, an earnings surprise has vaulted one of our newest trades higher by 20% overnight.

Here’s how it happened…

Just two short weeks ago, we told you that the market’s biggest, most recognizable growth stocks were ripping higher. The big boys grabbed the wheel while the more speculative stocks took a break.

One of these popular stocks flashed a huge buy signal. And it’s poised to take its rightful spot as one of the top comeback plays of the second half of the year after a massive earnings surprise.

I’m talking about Netflix (NASDAQ:NFLX).

Unless you were living under a rock, you remember that just a handful of powerful stocks were propping up the major averages last year. The famous FANG foursome – Facebook, Amazon, Netflix, Google—was leading the way. While the major averages went nowhere, these stocks shot to new highs.

2016 has a different vibe. Facebook and Amazon have stayed strong since the winter market swoon. Google shares finally turned higher in July. But Neflix wasn’t impressing investors. Folks were concerned that the company’s best days were behind it. The insane growth that propelled Netflix to a household name had hit a wall. Until now…

The forgotten FANG is back in action after blowing away expectations late Monday. If you thought growth was dead, look no further than these numbers:

Netflix booked earnings of 12 cents per share and revenue of $2.29 billion in the third quarter. That topped analyst expectations. But the real story is the streaming video service’s international push. The company was looking to add 2 million international subscribers, Business Insider reports. Instead, Netflix banked 3.2 million new international subs. That’s a huge beat!

“Netflix is making a big bet that the same mix of edgy original content and library programming that has taken the U.S. media world by storm will translate overseas,” The Wall Street Journal reports. “The September quarter’s performance was better than the year-ago quarter’s 2.74 million international subscriber additions, but in the intervening time Netflix has launched in more than 130 countries, elevating its growth potential substantially.”

You had me at growth

When it comes to a story stock like Netflix, investors don’t give a damn about earnings multiples. They want to see breakneck expansion into new markets with new services and technologies. Netflix delivers on all counts.

Even seasoned analysts are admitting that they have no idea how to properly forecast Netflix’s potential in overseas markets. Thanks to countless different laws and regulations, it’s nearly impossible to accurately predict how Netflix will fare in the long-run.

As traders, we can take advantage of the confusion. While Wall Street analysts chase their tails, you were able to capitalize on a well-known stock that was quietly breaking out. Sentiment was decidedly bearish—adding more fuel to the earnings fire we’re seeing this week.

streaminggains-dr

While everyone else fretted over Netflix subscriber counts and its lackluster performance, we bought the big breakout above the 200-day moving average. Netflix shares smashed through resistance to four-month highs, offering up the opportunity for fast gains heading into an unpredictable earnings season.

Sincerely,

Greg Guenthner
for The Daily Reckoning

P.S. You can’t forecast these results — sign up for my Rude Awakening e-letter, for FREE, right here. Never miss another buy signal. Click here now to sign up for FREE.

The post How to “Stream” a 20% Profit Today appeared first on Daily Reckoning.

This story originally appeared in the Daily Reckoning . The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today’s markets. Its been called “the most entertaining read of the day.

Report abuse

Comments

Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

Top Stories
Recent Stories

Register

Newsletter

Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.