Groupon Inc (GRPN), Netflix, Inc. (NFLX) and More ‘Market Moving’ Upgrades Worth Noting Last Week

Page 1 of 2

Stocks can be pushed higher or lower as analysts provide their outlooks. These calls are not enough to base an investment on, but should be considered as part of your research. Therefore, I am assessing a few of Thursday’s top calls, and determining if each was a good call.

Groupon Inc (NASDAQ:GRPN)

When it comes to technology, there is one analyst that I take more seriously than the others, and that is Gene Munster. Munster has been incredibly accurate at predicting trends, stock prices, and macro conditions. Therefore, when he says that Groupon Inc (NASDAQ:GRPN) could deliver a Q1 daily deals take rate of 33%, I tend to listen.

Groupon Inc

According to Munster, a 33% take rate would equate to revenue of $607 million, or $17 million better than the consensus for Groupon Inc (NASDAQ:GRPN)’s current quarter. While Munster has been correct in his calls of many tech stocks, we must also admit that he has had some trouble with Groupon Inc (NASDAQ:GRPN). The Piper analyst was quite bullish going into Q4 last quarter, which didn’t turn out so well. As a result, it’s hard to determine if maybe he’s too bullish on the stock or if there really is a fundamental shift occurring. Either way, the stock rallied 5.24% and I haven’t seen enough consistency from the company to call it a “buy.” Therefore, I think I will sit this one out.

Brown Shoe Company, Inc. (NYSE:BWS)

The Brown Shoe Company, Inc. (NYSE:BWS) continues with its strong year, as the stock rallied another 5.19% on Thursday. The large gains came after Brean Capital initiated coverage with a “Buy” rating, saying “it’s a compelling turnaround story.” The firm believes in the company’s strategy of downsizing to become slightly smaller but more profitable.

In the end, the market places a large amount of emphasis on earnings, and Brean Capital believes that the company’s strategy to become more profitable will be rewarded over time. I think this strategy makes sense, if the company is undervalued and if there is room for margin improvement. With Brown Shoe Company, Inc. (NYSE:BWS), there is a lot of room for improvement. The company has revenue of $2.60 billion yet a market cap of just $740 million. Therefore, I am a believer in this company’s future, but I would keep it on a short leash and would expect to see fundamental improvements every quarter, or else I would sell.

Netflix, Inc. (NASDAQ:NFLX)

On Wednesday, shares of Netflix, Inc. (NASDAQ:NFLX) traded lower after a downgrade. But on Thursday, Goldman raised its price target to $184 from $125, although reiterated its “Neutral” rating. Goldman’s call was more long-term, as they believe that the company’s domestic streaming sub base will grow to 53 million in five years, from its current 22.8 million. As a result, Goldman expects this increase in connected users will make the company more profitable and that it will be able to leverage its sub base to grow further.

As an investor, I like the call, I think $184 is fair based on its current price, but I do not favor the reasons. Sure, sub bases are important for the company, but looking ahead, competition continues to grow and I think Netflix, Inc. (NASDAQ:NFLX) is doing a great job in positioning itself for global growth. Therefore, I do think Netflix, Inc. (NASDAQ:NFLX) is a compelling story and I think expectations have been adjusted to its new business model and that shares will rise over time.

As an investor, I like the call, I think $184 is fair based on its current price, but I do not favor the reasons. Sure, sub bases are important for the company, but looking ahead, competition continues to grow and I think Netflix, Inc. (NASDAQ:NFLX) is doing a great job in positioning itself for global growth. Therefore, I do think Netflix, Inc. (NASDAQ:NFLX) is a compelling story and I think expectations have been adjusted to its new business model and that shares will rise over time.

Conclusion

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!