Oakmark Funds, an investment management firm, published its “Oakmark Fund” second quarter 2022 investor letter – a copy that can be downloaded here. The Oakmark Fund returned -17.8% during the second quarter, underperforming the S&P 500 Index’s return of -16.1%. In constructing portfolios for its clients, the fund seeks out companies that it believes are trading in the market at significant discounts to their underlying value. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.
In its Q2 2022 investor letter, Oakmark Fund mentioned Netflix, Inc. (NASDAQ:NFLX) and explained its insights for the company. Founded in 1997, Netflix, Inc. (NASDAQ:NFLX) is a Los Gatos, California-based streaming media company with an $84.8 billion market capitalization. Netflix, Inc. (NASDAQ:NFLX) delivered a -68.31% return since the beginning of the year, while its 12-month returns are down by -64.13%. The stock closed at $190.92 per share on July 18, 2022.
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.”
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Our calculations show that Netflix, Inc. (NASDAQ:NFLX) ranks 13th on our list of the 30 Most Popular Stocks Among Hedge Funds. Netflix, Inc. (NASDAQ:NFLX) was in 109 hedge fund portfolios at the end of the second quarter of 2022, compared to 113 funds in the previous quarter. Netflix, Inc. (NASDAQ:NFLX) delivered a -43.49% return in the past 3 months.
In June 2022, we also shared another hedge fund’s views on Netflix, Inc. (NASDAQ:NFLX) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.
Disclosure: None. This article is originally published at Insider Monkey.
