Netflix Inc (NASDAQ: NFLX) has come a long way since its days of mailing you rented DVDs. (Though it still does offer this service).
Listed on the tech heavy Nasdaq Inc (NASDAQ: NDAQ), Netflix now has a market capitalisation of US$215.4 billion (AS$301.7 billion). And its streaming services are now available in 190 countries.
Netflix shares weren’t immune to the wider market sell off during the initial onset of COVID-19. The Netflix share price dropped 22.1% from 4 March to 16 March. Since that low, however, it’s up 65.5%. And year to date, it has gained 48.1%.
But Netflix likely has a lot more growth ahead.
Netflix shares offer a big moat
Even before the pandemic saw much of the world forced to stay at home for weeks on end, Netflix was growing rapidly. And with the world growing wealthier and ever more people gaining access to TVs, that trend looks likely to continue.
The company’s massive offerings and market dominance provide a large defensive moat any would-be competitors need to ford. As such, I believe it’s unlikely any start-ups will offer serious rivalry in the foreseeable future.
That leaves competitors like Foxtel and Stan, owned by Nine Entertainment Co Holdings Ltd (ASX: NEC) in Australia, and HBO in the United States to fight it out.
Today’s international share nomination goes to…Netflix
If you’ve spent any time scrolling through the Netflix content menu, you’ll know it has a heck of a lot of material to watch on demand. More than any of us will ever likely watch in our lifetimes.
But beyond the vast quantity of streaming videos, Netflix is also providing great quality. At least according to the judges at this year’s prestigious Emmy Awards.
Yesterday (Aussie time), Netflix beat HBO for the second time in three years, receiving 160 Emmy nominations compared to 107 for HBO.
With high quality and an ever growing quantity of shows available at affordable prices, Netflix is one international share you may want to consider adding to your portfolio.
A note on international shares
Not everyone is comfortable buying international shares like Netflix. While it’s become much simpler and cheaper in recent years, there are a few other aspects you need to consider. Currency fluctuations are chief among them.
If the US dollar falls against the Aussie, as it has been doing in recent weeks, it would see your Aussie dollar returns increase once you sell your shares. But if the greenback rises, it will diminish your gains or increase your losses.
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Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Netflix. The Motley Fool Australia has recommended Netflix and Nine Entertainment Co. Holdings Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post Why the Emmys say ‘buy Netflix shares’ appeared first on Motley Fool Australia.
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