Oakmark Select Fund’s Top Q1 2022 Detractor: Netflix Inc. (NFLX)

Oakmark Funds, an investment management firm, published its “Oakmark Select Fund” first quarter 2022 investor letter – a copy of which can be seen here.  A decline of 6% was reported by the fund for the first quarter of 2022, compared to the S&P 500 Index, which declined 5% for the same period. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Oakmark Select 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 subscription streaming service and production company with a $95.7 billion market capitalization. Netflix, Inc. (NASDAQ:NFLX) delivered a -64.23% return since the beginning of the year, while its 12-month returns are down by -57.37%. The stock closed at $215.52 per share on April 22, 2022.

Here is what Oakmark Select Fund has to say about Netflix, Inc. (NASDAQ:NFLX) in its Q1 2022 investor letter:

“Netflix (NASDAQ:NFLX) (-38%)  was the most significant detractors in the first quarter – detracting twice as much as the next closest stock. Netflix is experiencing what we would describe as a Covid-19-induced hangover. The pandemic pulled forward subscriber growth while content spend was limited due to health restrictions pushing out production timelines. This led to a perfect storm of accelerated revenue and margin growth, which the Fund benefited from in 2020 and into 2021 when Netflix was one of our top performers. Now the reverse is occurring. Looking at Netflix’s business performance with a longer term lens, one hardly sees any disruption in the franchise. We used the price strength in 2021 to reduce our position and have used the current weakness to add to our exposure to Netflix.”

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Our calculations show that Netflix, Inc. (NASDAQ:NFLX) ranks 10th on our list of the 30 Most Popular Stocks Among Hedge Funds. Netflix, Inc. (NASDAQ:NFLX) was in 113 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 106 funds in the previous quarter. Netflix, Inc. (NASDAQ:NFLX) delivered a -45.78% return in the past 3 months.

In April 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 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.