Billionaire Rob Citrone Is Selling These 5 Stocks

2. Netflix, Inc. (NASDAQ:NFLX)

Number of Hedge Fund Holders: 109

Netflix, Inc. (NASDAQ:NFLX) provides media and entertainment services. Rob Citrone’s Discovery Capital Management held 28,495 shares of Netflix, Inc. (NASDAQ:NFLX) in Q4 2021, worth over $17 million, representing 1.28% of the portfolio. The hedge fund discarded its position in Netflix, Inc. (NASDAQ:NFLX) in the March quarter. 

Evercore ISI analyst Mark Mahaney thinks Netflix, Inc. (NASDAQ:NFLX) is “a great company and a great service” whose management has shown “extraordinary industry vision and the ability to pivot successfully”. However, growth has slowed significantly and he thinks the market will need to see “real success” from the ad-supported and password-sharing initiatives before attributing a higher premium multiple to the stock. He reiterated an In Line rating and a $245 price target on Netflix, Inc. (NASDAQ:NFLX) shares on July 20.

According to Insider Monkey’s data, 109 hedge funds were bullish on Netflix, Inc. (NASDAQ:NFLX) at the end of March, down from 113 funds in the prior quarter. Bill Ackman’s Pershing Square is a prominent stakeholder of the company, with 3.10 million shares worth $1.16 billion. 

Here is what Oakmark Fund has 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.”