This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Netflix Is Overpriced but Apple Is On Sale

"We have a long way to go, but we are very happy with the quarter," Hastings said in an interview Wednesday. That quote may be the biggest clue yet as to how overpriced and overvalued NFLX shares truly are. It's like counting your chickens before they hatch!

When the giddy euphoria and celebration cools down, my guess is that a big shorting effort on NFLX shares will commence. Then shares will go down low enough that the Relative Strength Indicator will signal that shares are oversold, and as sure as clock work, investors will drive the stock back up again.

My best suggestion is to stand aside if you don't already own shares of NFLX until the stock drops back down to earth. Let the share price bring the forward PE ratio down to a "modest" 44 times earnings and perhaps you'll be able to buy shares for $75 or less.

Be a rational, logical and patient investor. Chances are if you're prudent you'll come out ahead in the long run without having to take wild-eyed risks. Spend your efforts evaluating oversold companies like Apple, and do your research to find the next Netflix opportunity before it blasts off into outer space.

At the time of publication the author had a position in AAPL and is waiting for the price to come down on NFLX before buying.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Jim Cramer's protege Dave Peltier finds you Stocks Under $10 picks with explosive upside potential. See what he's trading today with a 14-day FREE pass.

4 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $130.28 0.47%
NFLX $558.40 -0.12%
FB $81.53 -1.07%
GOOG $565.06 3.30%
TSLA $218.42 -0.08%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs