Topic: How To Invest

Thanks for your continued sound advice. What’s your take on Netflix?

Article Excerpt

Netflix, $168.30, symbol NFLX on Nasdaq (Shares outstanding: 52.3 million; Market cap: $8.8 billion; www.netflix.com), is the largest online entertainment subscription service in the U.S., with over 100,000 DVD titles for rent. It has various subscription plans that let users rent up to eight movies at once, with no due dates or late fees. Monthly plans vary from $4.99 to $47.99. The company’s distribution centres across the U.S. allow most subscribers to get next-day delivery. Netflix continues to report higher revenue (up 30.7%, to $553.2 million, in the three months ended September 30, 2010) and higher earnings (up 35.2%, to $0.73 a share). The company’s strong growth will likely continue at least into next year. As well, online streaming of movies and television shows will play an increasingly important role. For example, the company recently made its first move outside the U.S. by offering online video streaming in Canada. Netflix has a dominant position in a growing market. However, the shares are…