Friday, May 1, 2009

Bearish on

This week Investing News Weekly is looking at a company that gives what they call "a cheap alternative to our favorite weekend entertainment activity during these tough economic times, staying home and renting a movie." They go on to say, "With its biggest competitor facing the continued negative sales growth while it continues to show positive growth, this company should be the eventual winner. Our Bearish pick is a known name brand and once celebrated stock that has fallen and investors might be falsely thinking its time to get on board after it beat expectations this week and had a nice rally. The problem is that its product is still high priced and one of the first things people mention when asked what they are cutting on an everyday basis to combat the recession."

Quote: "Netflix has been on our radar for a while and we have been waiting for a pullback to recommend it. It’s down about 10% over the last 3-4 days and we don’t see it going below $40. What really make us look at Netflix as a potential long term buy is the demise of Blockbuster. Anyone that has used Redbox or Netflix will most likely not go back to Blockbuster. If Blockbuster goes belly up which is a real possibility with its negative sales growth over the past 4 years and its ballooning debt, Netflix will be the direct beneficiary."

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