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TheStreet Open House

NFLX, EMC, AMD: Which to Buy, Sell and Hold

NEW YORK (TheStreet) -- Netflix (NFLX), EMC Corporation (EMC) and Advanced Micro Devices (AMD) are all trading lower. Here's what TheStreet Ratings Team has to say about the stocks.

Netflix

Fueled by better-than-expected earnings on Monday evening, Netflix surged after markets opened, up 9.3% to $387.93. As of 12:30 a.m. EDT, the stock has changed course, plummeting 4.9% to $337.62.

The streaming service reported third-quarter earnings of 52 cents a share, beating the expectations of analysts surveyed by Thomson Reuters by 3 cents, on revenue of $1.106 billion.

Separately, CEO Reed Hastings said in a conference call Netflix was still uninterested in hosting sports content, quashing rumors of a partnership with the NFL. "All [our] attributes are on-demand and I don't think that brings much to sports viewing which is primarily a linear experience," he said.

TheStreet Ratings team rates Netflix Inc as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate Netflix Inc (NFLX) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, premium valuation and generally higher debt management risk."

EMC Corporation

Computer storage company EMC Corporation reported lower-than-expected third-quarter earnings of 40 cents a share. Analysts surveyed by Yahoo! Finance had predicted 45 cents a share.

"While our financial results for the third quarter were impacted by a decline in US federal spending and a backend-loaded quarter, we achieved almost all of our strategic and operational goals," said President and CEO David Goulden.

In its core Information Storage unit, year-on-year revenue increased only 1.26% to $3.77 billion, though this was partially offset by a 66% increase in sales for flash and scale-out storage in its Emerging Storage business.

The Hopkinton, Mass.-based company recorded a total $5.5 billion in revenue for the quarter, 5% higher than a year earlier. Total revenue for 2013 is expected to be $23.25 billion, 25% of which will be operating income.

Shares have dropped 3.7% to $24.31 as of 12:30 p.m. EDT, due to missed analyst expectations following reporting.

TheStreet Ratings team rates EMC Corporation as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate EMC Corporation (EMC) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Advanced Micro Devices

Advanced Micro Devices has continued its downward trend, giving up 5.9% to reach $3.17 as of 12:30 p.m. EDT. Since reporting third-quarter results Thursday evening, the semiconductor specialist has dropped 11%.

Contributing to a bearish investor outlook, Bernstein Research downgraded its stock rating to "underperform" from "market perform", slashing its price target to $2.50 from $3.

TheStreet Ratings team rates Advanced Micro Devices as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate Advanced Micro Devices (AMD) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally high debt management risk."

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