5 Best Stocks to Invest Your $1000 According to Reddit

3. Netflix, Inc. (NASDAQ:NFLX)

Number of Hedge Fund Holders: 95

Most Redditors believe that buying Netflix, Inc. (NASDAQ:NFLX) on the dip is one of the best ways to invest your $1,000. The stock has lost approximately 63% in value year-to-date as of August 26. However, Redditors think the company’s underlying fundamentals remain attractive, and the new ad-supported tiers will be a positive catalyst. 

CFRA analyst Kenneth Leon downgraded Netflix, Inc. (NASDAQ:NFLX) to ‘Sell’ from ‘Hold’ on August 22 with a price target of $238, down from $245. The analyst said the shares may underperform the S&P 500 Index for the rest of 2022 after rising 40% from their mid-July lows. Netflix, Inc. (NASDAQ:NFLX)’s new advertising-supported tier is a primary catalyst, but the service “may not be visible until 2023”, as per the analyst.  

Among the hedge funds tracked by Insider Monkey, 95 funds were long Netflix, Inc. (NASDAQ:NFLX) at the end of Q2 2022, compared to 109 funds in the first quarter. Ken Fisher’s Fisher Asset Management featured as the largest stakeholder of the company, with 6.5 million shares worth $1.15 billion. 

Here is what Oakmark Fund had to say about Netflix, Inc. (NASDAQ:NFLX) in its Q2 2022 investor letter:

“Netflix‘s stock price was down considerably after providing a weaker than expected outlook for both subscriber growth and profit margins. After meeting with management and scrutinizing our investment thesis, we lowered our estimate of business value to account for the company’s softer near-term guidance. However, we believe the decline in the company’s share price more than adjusts for this. Indeed, Netflix now trades for a discount to the S&P 500 Index on next year’s GAAP earnings despite our view that the company remains a much better than average business run by a highly accomplished management team. We believe the company’s lead in streaming remains intact and we expect terminal operating margins to be substantially higher than they are today. Furthermore, we are encouraged by Netflix’s potential to enhance revenue growth through advertising, the monetization of password sharing and further penetrating international markets.”