To The Moon

Having been outperforming the market, is Netflix offering the best chance to buy?

A very interesting state from an analyst, who claims "FAANG" is out of date, and it is time to redefine the top Tech enterprises with "MATANA".

"MATANA" means$Microsoft(MSFT)$(Microsoft), $Apple(AAPL)$(Apple), $Tesla Motors(TSLA)$(Tesla), $Alphabet(GOOG)$$Alphabet(GOOGL)$(Alphabet), $NVIDIA Corp(NVDA)$(Nvidia) and$Amazon.com(AMZN)$ Amazon. means the adjustment of the original$Meta Platforms, Inc.(META)$Facebook (Meta) and$Netflix(NFLX)$(Netflix), adding Microsoft, Tesla and Nvidia.

Microsoft and Tesla have always been the tops in their industry, NVIDIA may face some semiconductor demand issues but still a hard technology company.

Getting rid of Facebook (Meta) is smart too, because the dying communications company has not made any industrial changes with an illusinal "metaverse", which cannot be realized for long time.

But controversy lies in removing Netflix seems controversial at present, Because it just announced in Q2 financial report that The new "advertising plan" is expected to become the second growth curve.

The performance of the secondary proves it.

Since the financial report on July 18, NFLX has increased by 13.82%, beat $S&P 500(.SPX)$'s 0.3% in the same period, which shows that NFLX has been recognized by a large number of institutional investors.

Some New developments in the advertising business

First, the company is expected to implement it in early 2023, and carry out some soft starts before the end of 2022, and at the same time, it will serveThe new advertising support version is priced at $7-9 per month (user subscription cost), and offers a customer-friendly low ad load-4 minutes per hour, far less than the 10-20 minutes per hour for radio and cable TV. The company expects to get about 50 million subscribers first

Second, Netflix's rival $Walt Disney(DIS)$, will also launch an ad support layer on December 8, with Disney+'s CPM charges $50, while Netflix aims at $60 or $80 later.

Third, According to the statistics of the market share of Nielsen's two or more users watching movies,In July, Netflix remained at a high level of 8.0%, while competitor Disney dropped from 2% to 1.8%. And Netflix's Stranger Things is hereThe North American market in the summer file achieved the best results. Among the best-selling content of streaming media in August, Netflix still dominates the list.

We believe Q3 performance in North America will be steady. Of course, the growth of Netflix's subscription data generally depends on overseas. Most overseas dramas are produced locally.

Therefore, from the perspective of asset allocation, Netflix is one of the few technology companies that can see new growth points in the next six months. Although its share price has dropped by 62% in the case of two consecutive financial reports this year, it also means that the current valuation level is relatively safe.The company's EV/TTM EBITDA is 16 times, Disney 17 times, and the $Warner Bros. Discovery(WBD)$is 24 times.

For investment strategy,The second half of 2022 may be the time when investors buy Netflix's advertising revenue expectations in 2022 ahead of schedule. However, the US stock market is still under pressure. Therefore, how to "invest in potential technology companies in weak markets" has become a difficult point.

It is the simplest way to buy stocks and bargain-hunting, and we can also choose some trading strategies with different risk preferences.

1. If you are relatively conservative,It is safe to choose the strategy of naked Sell PUT .The current price has been maintained at a certain level for a long time. It is a good strategy to choose PUT with a maturity date of about ONE MONTH.

2. If you buy stocks directly, you can also Sell Covered Call with a slightly higher price to gain some extra money. The expiration date of options can generally be about one month.

3.And more risk-on investors, choose call options (Buy CALL), However, in order to reduce the loss of time cost, it is recommended to choose forward options for more than one month.