7 Stocks to Sell Before the New Year - 1 of 7

#1 - Netflix (NASDAQ:NFLX)

Let’s start out with a pick that may sound contrarian, but it’s really not. Binge-watching isn’t really my jam. There are so many other things to do, let alone watch. However, I’m not the target audience for Netflix (NASDAQ:NFLX). Nonetheless, I have a subscription, and my account gets charged every month like clockwork.

Ah, recurring revenue. The golden egg is being laid by one of the market’s golden geese. Recurring revenue is important for Netflix in particular because the company has to pay to create its original content. Prior to the pandemic, investors saw that as a headwind for the stock. But now Netflix has received a second wind.

All that being said, NFLX stock is down nearly 13% from its year-to-date highs around $550. In fact, at three separate times this year, that stock price has served as a point of resistance. In each case, the stock found support around the $460 level. It appears Netflix is heading in this direction. But I have another concern.

In January, Netflix loses The Office. Can one program make a difference?  According to an InMyArea Research survey conducted earlier in 2020, more than 18 million U.S. subscribers watch the show. And 53% of those viewers are in the critical 18-44 age demographic. Of those surveyed, 10% said they would cancel their subscription once The Office closed its doors on Netflix. That would be a hit of about $935 million. That may not seem significant for a company that is on pace to generate nearly $25 billion in revenue in FY2020. But the survey was conducted largely prior to the pandemic. As consumers have had a chance to test drive additional options, they may decide to leave as well.

All I’m saying is there are both technical and fundamental reasons for taking some profits on Netflix and waiting on the next leg up.

About Netflix

Netflix, Inc provides entertainment services. It offers TV series, documentaries, feature films, and games across various genres and languages. The company also provides members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, TV set-top boxes, and mobile devices. Read More 

Current Price

$558.40

Consensus Rating

Moderate Buy

Ratings Breakdown

21 Buy Ratings, 12 Hold Ratings, 1 Sell Ratings.

Consensus Price Target

$628.76 (12.6% Upside)