In this article, we will take a look at the 5 best streaming stocks to buy now. For a detailed analysis of these companies, go directly to the 10 Best Streaming Stocks to Buy Now.
5. Roku, Inc. (NASDAQ: ROKU)
Number of Hedge Fund Holders: 60
Total Value of Hedge Fund Holdings: $3.23 Billion
Ranking 5th in our list of the 10 best streaming stocks to buy now is digital media manufacturer Roku, Inc (NASDAQ:ROKU). California-based Roku, Inc has over 51.2 million active users. Last month the company purchased Nielsen Holdings PLC (NYSE:NLSN) and integrated Nielsen’s advertisements and material measurement items into the Roku platform.
Roku, Inc (NASDAQ:ROKU) has a market cap of $41.0 billion and total net revenue of $319 million in 2020. On April 29, Wedbush analyst Michael Pachter upgraded Roku Inc. from Neutral to Outperform. Shares of ROKU gained 169% over the past twelve months.
There were 60 hedge funds that reported owning stakes in Roku, Inc. at the end of the fourth quarter, up from 59 funds a quarter earlier. The total value of these stakes at the end of Q4 is $3.23 billion.
RGA Investment Advisors mentioned that ROKU has been either the primary or second-largest generator of their portfolio success in its Q4 2020 investor letter:
“For two years running, Roku has now been either the largest or second-largest driver of performance in portfolios. When we purchased Roku, obviously we never expected such a phenomenal outcome, so quickly—these things can only be chalked up to luck. However, we do think luck is the residue of design and Roku had all the hallmarks ex ante as the kind of position that could do something wildly spectacular. One of the first signs in seeing Roku’s potential was the sharp contrast between our modeled expectations for the top line of the business and where the consensus expectations were. This was the Shopify set up all over again. By this time, we had added an additional tool to our analytical framework, and this helped further enforce our conviction that not only was it we who were right about where things should go, but also that the very existence of this gap could be a potent source of fuel behind the stock as the world came around to our expectation. Specifically, we had become increasingly comfortable building lifetime value analyses of companies, and notably, when we bought Roku, we were quite confident that with only modest annual increases in average revenue per user (ARPU), and a 5-year average customer lifespan, we were buying the company for its existing customer base and nothing more. In other words, the growth at Roku was entirely free at the prevailing prices we bought into.