Netflix Shares Are Smoking Hot Once Again

By Xavier Brenner

One of the biggest market stories Tuesday had nothing to do with Apple’s (AAPL) quarterly earnings and dividend hike or the bizarre fake AP tweet that temporarily sent the stock market reeling. It was Netflix’s (NFLX) monster move up, further evidence that this DVD and movie-streaming service is back in a big way. Here are five wondrous facts about Netflix as its stands today:

1)  Share Price: Netflix stock shot up 24% today to $216.99 and is up 134% on the year, making it the best-performing stock in the Standard & Poor’s 500 Index this year. It’s also outperforming in percentage term tech blue chips such as Apple (AAPL), Google (GOOG) and Facebook (FB).

NFLX Chart

NFLX data by YCharts

2)  Subscribers: In its strong first quarter earnings results, Netflix noted that it has signed up 2 million new customers for its $8-a-month U.S. streaming service, the largest part of its business. Overall, subscribers in the U.S. hit 29.2 million members. If you throw in international customers in Canada and parts of Europe and Latin America, the grand total is 36 million. This infographic from Statista is an excellent overview.

Netflix

3)  Overtaking HBO: With 29.2 million paying customers, Netflix now has more US subscribers than premium cable channel HBO (28.7 million), as of the end of the first quarter, according to SNL Kagan numbers. Globally, HBO still rules with 114 million subscribers compared with Netflix’s 36 million.

4)  Scale: During peak Internet usage periods, Netflix dominates North American fixed networks and uses no less than 33% of total bandwidth capacity, according to research firm Sandvine.

5)  Programming: Netflix received plenty of critical praise for the series " House of Cards," a political drama starring Kevin Spacey. Last December, Netflix and Walt Disney (DIS) unveiled a licensing agreement that will bring Disney movies to the online video streaming site starting in 2016. But profit margins on licensed content could prove difficult to sustain. As Felix Salmon wrote last year, “any time that Netflix builds up a profit margin, the studios will simply raise their prices until that margin disappears.”

Photo: HackingNetflix

The investments discussed are held in client accounts as of March 31, 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable.

Covestor Ltd. is a registered investment advisor. Covestor licenses investment strategies from its Model Managers to establish investment models. The commentary here is provided as general and impersonal information and should not be construed as recommendations or advice. Information from Model Managers and third-party sources deemed to be reliable but not guaranteed. Past performance is no guarantee of future results. Transaction histories for Covestor models available upon request. Additional important disclosures available at http://site.covestor.com/help/disclosures. For information about Covestor and its services, go to http://covestor.com or contact Covestor Client Services at (866) 825-3005, x703.

null

More from Stocks

Week Ahead: Trade Fears and Stress Tests Signal More Volatility To Come

Week Ahead: Trade Fears and Stress Tests Signal More Volatility To Come

3 Great Stock Market Sectors Millennials Should Invest In

3 Great Stock Market Sectors Millennials Should Invest In

Why Millennials Are Ditching Stocks for ETFs

Why Millennials Are Ditching Stocks for ETFs

Trump's 'Space Force' Could Launch a $1 Trillion Industry, Morgan Stanley Says

Trump's 'Space Force' Could Launch a $1 Trillion Industry, Morgan Stanley Says

Abiomed Stock Should Rise Some 12% From Here, Piper Jaffray Analyst Says

Abiomed Stock Should Rise Some 12% From Here, Piper Jaffray Analyst Says