Why hello there.
Today I'm keeping 3 Things short because, well, it's a slower news day and I think that Netflix has two parts.
But anyway, let's dive right in.
And, in case you missed it, we talked about pot stocks, Cathie Wood and the banks in yesterday's column. Catch it here.
First Up, FAANG
It's Thursday and that means that it's my Real Money column day!
This week, I focused on one of the questions I get asked the most and that is: Why won't these younger investors invest in stocks like Facebook (FB) - Get Report, Apple (AAPL) - Get Report, Alphabet (GOOGL,) - Get Report and Netflix (NFLX) - Get Report?
I'm not going to spoil my column or rewrite my thoughts here.
What I will say is that there are a handful of reasons why we won't see the momentum train pull up to the FAANG station.
One such reason is that some Reddit investors want to focus on quicker trades that turn a nice profit.
However, that's not to say that there aren't Reddit investors in FAANG names either to hold on to or just to make profits off of.
I've said it before and I'll say it again, every individual trader or investor has their own thought process around stocks whether it's GameStop, AMC, Apple, or Netflix.
Reddit investors aren't a group with a single mindset (insert clapping hands emoji here).
I've reached out to my Twitter followers, and I'll reach out to everyone reading this, too.
For next week's column, I want to speak to anyone who has either picked up investing during the pandemic or who has been on Reddit for a while should reach out to me either on Twitter, Instagram, or email@example.com.
Focusing In One One FAANG In Particular...
And that's Netflix.
We do have their earnings next week on Tuesday, July 20 after the bell.
I do want to focus on two aspects of this stock...
Next week, I want to sit down with my colleague, Stephen Guilfoyle to talk about Netflix's earnings report.
And he took to Real Money to talk about his trade ahead of earnings so here's a sneak peek of what he's thinking.
"Thirty-four sell-side analysts follow Netflix. Expectations for EPS are running at $3.15 with a range of $3.01 to $3.27. For the one-year-ago period, NFLX posted EPS of $1.59, so the earnings growth is obvious. As for revenue generation, Wall Street is looking for $7.32 billion, which would be up 20% year-over-year, and that would be a deceleration and the slowest pace of growth in memory. In fact for the year, Wall Street sees revenue growth of less than 19% and just barely more than 15% for next year (2022). Hence, why Netflix is getting aggressive," wrote Guilfoyle. "Don't misunderstand me. The company is not in trouble. At last check, Netflix had 208 million subscribers."
Now Here's What I'm Looking At
Netflix and video games sitting in a tree?
We just might see Netflix roll out video games on its platform.
At least, that's what the hiring of Mike Verdu as vice president of game development suggests.
Verdu was an executive at both Facebook and Electronic Arts EA.
While the news might be a nothing-burger for now, until we get a more definitive plan out of Netflix, it is interesting to get this headline just a couple of days before the company reports its earnings.
At least, if I were able to ask questions on that earnings call, I'd definitely want to hear a little bit more about our new pal Mike and his role.
But until we hear anything else, Bloomberg has cited a source saying that the company might offer video games on its streaming platform "within the next year."
Aside from me being a video game nerd, this move stands out to me as a way for Netflix to push away from the pack that have herded into the very crowded streaming pen.
It's also a way for the company, if it can roll out solid offerings that the consumer enjoys, to solidify its right to be in the FAANG acronym.
Because, I don't know about y'all, but I'm a little tired of the debate around whether or not Netflix is worthy of FAANG.
I'll be honest, though, this is a debate I'm picking up next week with my pals Kevin Curran and Chris Versace in a Real Money ˆwebinar focused on FAANG. I'll share more details soon, but keep your eyes peeled.