Polen Capital, an investment management firm, published its “Polen Focus Growth Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. During the first quarter of 2022, the Polen Focus Growth Composite Portfolio (the “Portfolio”) returned -13.39% and -13.56%, gross and net of fees respectively. The Russell 1000 Growth Index returned -9.04% (the “Index”) and the S&P 500 (the “S&P”) -4.60%. Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Polen Focus Growth 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 $90.1 billion market capitalization. Netflix, Inc. (NASDAQ:NFLX) delivered a -66.33% return since the beginning of the year, while its 12-month returns are down by -58.25%. The stock closed at $202.83 per share on June 08, 2022.
Here is what Polen Focus Growth Fund has to say about Netflix, Inc. (NASDAQ:NFLX) in its Q1 2022 investor letter:
“Using Netflix as an example, the company recorded robust results for the December quarter but gave subscriber growth guidance well below what we would have expected for the current March quarter. Management expects muted net new subscriber additions this quarter, but they were hard pressed to explain why net new adds look to be coming in weaker than expected. Viewership and retention from current subscribers remain solid, which hints that competition is not likely the cause of the weakness. In addition, the weakness is broad-based by geography and demography, which also seems to indicate that it is not likely a TikTok or other competition-related phenomenon. Nor is it likely a maturity of the opportunity—even markets with relatively low streaming penetration are currently showing muted growth like their more mature counterparts.
After digesting Netflix’s earnings report and many others that received a “boost” from COVID-19 and quarantining in 2020 and 2021, it appears that the slower net adds relates more to a “pull forward” in new subscribers over the last two years. We are now witnessing uneven growth in that base coming out of this unique period. We believe the long-term opportunities for Netflix remain unchanged and decided to take advantage of the drawdown to double our weighting in the Portfolio.”
Photo by Thibault Penin on Unsplash
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 first quarter of 2022, compared to 113 funds in the previous quarter. Netflix, Inc. (NASDAQ:NFLX) delivered a -43.47% return in the past 3 months.
In May 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.
