We recently published a list of 10 Stocks with Consistent Growth to Buy. In this article, we are going to take a look at where Netflix Inc. (NASDAQ:NFLX) stands against other stocks with consistent growth to buy.
Currently, financial markets are experiencing a mix of optimism and caution as investors react to changing economic conditions. Many are closely watching trends and data that could impact future growth and stability.
Tom Lee, managing partner and head of research at Fundstrat Global Advisors, recently shared his insights on the current market trends during an interview on CNBC’s ‘Squawk Box’ on October 14. He acknowledged that he underestimated the strength of the market, noting that it has been surprisingly resilient despite expectations of volatility leading up to the 2024 election. Lee highlighted that there is a significant amount of cash—about $6 trillion—sitting on the sidelines, which has contributed to the market’s stability. He observed that many investors had anticipated a recession, but instead, companies have shown strong earnings and resilience.
Lee also mentioned that the Federal Reserve is likely to adopt a supportive stance as inflation data continues to trend toward their 2% target. He believes that regardless of who wins the upcoming election, stocks are likely to perform well in the following year. Lee pointed out that markets tend to thrive on visibility and certainty, suggesting that if one candidate appears to be gaining an advantage, it could lead to a more favorable trading environment before the election. Overall, he remains optimistic about the market’s outlook.
S&P 500 and Dow Reach New Heights Ahead of Election Season
On October 18, both the S&P 500 and the Dow Jones Industrial Average reached new record highs, marking six consecutive weeks of gains for these major indices. As reported by CNBC, the S&P 500 rose by 0.40%, closing at 5,864.67, while the Dow rose by 0.09% and added 36.86 points to close at 43,275.91. The Nasdaq also performed well, increasing 0.63% to close at 18,489.55. This marks the longest winning streak of the year for both the Dow and S&P 500, with notable increases in their overall performance.
As earnings season progresses, over 70 companies in the S&P 500 have reported their results, with about 75% of those companies surpassing expectations. Despite potential market volatility leading up to the upcoming election, some analysts believe that stocks may continue to rise through November.
Rob Williams, a chief investment strategist at Sage Advisory, noted that this trend is unusual for an election year, where markets typically hesitate before improving post-election. He suggested that investors might be optimistic about a possible victory for Republican nominee Donald Trump, whose policies are seen as more favorable for businesses in terms of regulations and taxes.
Methodology
To compile our list of the 10 stocks with consistent growth to buy, we used the Finviz and Yahoo stock screeners. We sorted our results based on market capitalization and picked the top 30 stocks.
Next, we focused on identifying stocks that had demonstrated consistent growth. From the initial list, we narrowed our choices to stocks that have grown their revenue positively over the past 5 years. We further refined our selection to include only those that had positive revenue growth each year in their last five reported annual revenues.
To ensure the reliability of our findings, we consulted reputable sources such as SeekingAlpha, which provided insights into the revenue CAGR over the past five years, and Macrotrends, which offered information on historical annual revenue data. Finally, we have ranked the 10 stocks with consistent growth to buy below in ascending order based on their five-year revenue CAGR.
Additionally, we mentioned the hedge fund sentiment surrounding each stock, which was taken from Insider Monkey’s database of 912 elite hedge funds as of Q2 of 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A home theater with family members enjoying streaming content together.
Netflix Inc. (NASDAQ:NFLX)
5-Year Revenue CAGR: 15.54%
Number of Hedge Fund Holders: 103
Netflix Inc. (NASDAQ:NFLX) is an American entertainment company known for its streaming service that offers a wide variety of TV shows, movies, documentaries, and original content. The company has invested heavily in producing original programming, such as popular series like “Stranger Things” and “The Crown,” which have helped attract millions of subscribers worldwide. Netflix boasts more than 270 million paid memberships across more than 190 countries. Subscribers enjoy a vast selection of TV series, films, and games in various genres and languages, making Netflix a popular choice for diverse audiences.
The company is actively enhancing its business and performance, demonstrating strong growth in Q3 2024. Netflix Inc. (NASDAQ:NFLX) reported a 15% increase in revenue year-over-year, driven by a 15% rise in average paid memberships. Its operating income surged by 52%, reaching $2.9 billion. This growth reflects Netflix’s successful strategy of delivering popular new series and films, such as “The Perfect Couple”, “Emily in Paris”, and “Beverly Hills Cop: Axel F,” which have resonated well with audiences.
Looking ahead, Netflix Inc. (NASDAQ:NFLX) is focused on expanding its advertising business, which saw a 35% increase in memberships quarter-over-quarter. The company is working to grow its advertising business and enhance its services for advertisers. Netflix plans to launch its new advertising technology platform in Canada in the fourth quarter of 2024, with a broader rollout expected in 2025.
Netflix is also gearing up for a strong Q4 slate with highly anticipated content like “Squid Game” Season 2, the Jake Paul/Mike Tyson fight, and live NFL games on Christmas Day. With healthy engagement levels and a commitment to improving its offerings, Netflix Inc. (NASDAQ:NFLX) is well-positioned for continued revenue and profit growth, making it an attractive stock option for investors seeking long-term value.
In the last five years, Netflix Inc. (NASDAQ:NFLX) has achieved an average revenue growth rate of 15.54% annually, while its net income has grown at an average rate of 43.86% during the same period. This brings NFLX to the 8th spot on our list of the 10 stocks with consistent growth to buy.
According to Insider Monkey’s Q2 2024 database of over 900 hedge funds, 103 hedge funds held stakes in Netflix Inc. (NASDAQ:NFLX).
Overall, NFLX ranks 8th on our list of stocks with consistent growth to buy. While we acknowledge the potential of NFLX, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NFLX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.