Day: September 21, 2021

Here’s why investors can consider Netflix in the next market crash

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Happy family watching Netflix together.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Streaming content pioneer Netflix (NASDAQ: NFLX) is in a great position to thrive as more of the world chooses to stream their content instead of watching over linear TV. The company is gaining millions of new subscribers during the pandemic, and the scale is improving profit margins and cash flows. 

The downside for investors is that Netflix’s success is no secret to the market. The stock is performing well, rising 102% over the past two years and over 500% in five years. That said, during a stock market crash, Netflix’s stock may come down along with the broader market, allowing investors to buy this excellent performer at a lower entry point.

Subscriber growth is fueling profits

Netflix boasts 209 million paying subscribers worldwide, including 74 million in the U.S and Canada. While it may feel like Netflix has been around forever and has saturated the market for its services, there is plenty of room for growth. In the U.S. in particular, streaming made up just 27% of total viewing time compared with 63% for linear TV, according to Nielsen.

As Netflix continues building out its content library, getting to know its viewers better, and customizing experiences to suit their needs better, the company can take a more significant share of viewing hours. That should lead to more pricing power and the ability to raise monthly fees without losing subscribers. 

For now, results are already quite impressive. In its fiscal second quarter, Netflix’s 209 million viewers generated $7.3 billion in revenue. Annualized, that would amount to $29 billion, giving Netflix a robust content budget, which will help attract new subscribers and retain existing ones.

The company’s growing scale is also improving profit margins. Indeed, in the most recent quarter, Netflix’s operating profit margin was 25.2%, 310 basis points higher than the 22.1% it earned in the same quarter last year. Management feels these results are sufficient enough to sustain the company without tapping into capital markets for cash.

Reducing competitive risk

Another exciting development for Netflix during 2020 and 2021: It reduced the market’s perception of competitive risk. Several streaming competitors entered the space during that time, but it did not harm Netflix. Most notably, Disney‘s flagship service Disney+ attracted 116 million subscribers from November 2019 to July 2021 without taking them away from Netflix.

That raises credence to the argument that streaming competitors don’t hurt Netflix, and they may even be helping the streaming category as a whole. As more services enter the market, canceling linear TV services and switching to streaming is a more compelling proposition for customers. The overall costs are likely to be lower for them, and they have better control over the selection of content. 

A market crash could present an opportunity 

Netflix is trading at a price-to-earnings ratio of 61, the lowest it has sold for going back to 2015. On that basis, Netflix stock is inexpensive right now. However, a stock market crash could take Netflix stock down along with it — and such a drop could allow investors to buy it at an even more favorable entry point.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Here’s why investors can consider Netflix in the next market crash appeared first on The Motley Fool Australia.

Should you invest $1,000 in Netflix right now?

Before you consider Netflix, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Netflix wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

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Parkev Tatevosian owns shares of Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Netflix and Walt Disney. The Motley Fool Australia has recommended Netflix and Walt Disney. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Why is the Liontown (ASX:LTR) share price sinking 6% today?

Worker in hard hat looks puzzled with one hand on chin

The Liontown Resources Limited (ASX: LTR) share price is deep in the red today.

Shares in the mining exploration company plunged more than 6% in today’s session to an intraday low of $1.41. At the time of writing, they have clawed back some ground to be down 3.16% at $1.47 apiece.

Let’s take a look at why the Liontown share price is struggling.

What’s weighing down the Liontown share price?

The Liontown share price has been under pressure today despite the company not releasing any price-sensitive news.

However, there are multiple factors that could be weighing down its shares.

The first consideration is weakness in the broader market. In addition, sliding lithium spot prices could also be having an effect.

Another consideration is the company’s recent performance.

Since the start of September, shares in the mining exploration company have soared more than 57%.

As a result, many investors may be looking to lock in profits given the uncertainty in the broader market.

What’s Liontown been up to?

Shares in Liontown have had a miraculous run this month.

Investors have been bidding shares in the mining explorer higher as anticipation builds for the Initial Public Offering of its spinoff.

Last month, Liontown announced that it will be spinning off its non-lithium assets into Minerals 260 Limited.

In return, current Liontown shareholders will receive 1 share in Minerals 260 for every 11.91 Liontown shares they hold.

As part of the demerger, Minerals 260 will own the Moora Gold-Nickel-Copper-PGE Project.

In addition, the new company will also have an option interest in the Koojan Gold-Nickel-Copper-PGE Project and the Dingo Rocks Project.

Minerals 260 is poised to float on the ASX on 11 October.

In addition, the Liontown share price has also received a boost after the company was added to the ASX 300 Index as part of S&P Dow Jones Indices’ quarterly rebalance.

Snapshot of the Liontown share price

Liontown shares have been the beneficiary of increased mining exploration expenditure and a commodity price boom in 2021.

Liontown is best known for its Kathleen Valley Lithium project in Western Australia.

Since the start of the year, shares in the mining explorer have soared more than 338%. They are up more than 684% over the last 12 months.

The post Why is the Liontown (ASX:LTR) share price sinking 6% today? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Liontown right now?

Before you consider Liontown , you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Liontown wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

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Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Widgie Nickel (ASX:WIN) share price jumps 45% after IPO

Two people jump and high five above a city skyline.

The Widgie Nickel Ltd (ASX: WIN) share price is having a fantastic debut on the ASX boards.

This afternoon the nickel explorer’s shares reached a high of 29 cents.

When the Widgie Nickel share price reached that level, it was up 45% from its listing price.

Widgie Nickel share price rises following IPO

Investors have been bidding the Widgie Nickel share price higher today following the successful completion of its initial public offering (IPO).

That IPO saw the company raise a total of $24 million before costs at an issue price of 20 cents per new share. This gave the company a market capitalisation of $50 million at listing.

Though, with the Widgie Nickel share price rising to 29 cents, its market capitalisation has now ballooned to $72 million.

What is Widgie Nickel?

Widgie Nickel is exploring the Mt Edwards Nickel Project in Kalgoorlie in Western Australia.

According to the company, the Mt Edwards Nickel Project is a unique consolidation of a vast ~240 square kilometre package of highly prospective nickel and new economy metal prospects. It has a large nickel sulphide resource base of 10.2Mt at 1.6% Ni for 162.6kt of contained nickel, in a globally significant nickel district.

In addition, the company notes that the Mt Edwards Nickel Project possesses exploration upside potential to underpin long-term shareholder value creation. It has material exploration campaigns planned for the post listing period.

Widgie Nickel’s Managing Director, Steve Norregaard, appears positive on the future.

He commented: “The successful entitlement offer has ideally positioned Widgie to methodically work towards unlocking the significant latent potential the Mt Edwards Nickel Project possesses, which was evidenced by the promising drilling results at Munda we released to the market today.”

“Widgie intends to commence an ongoing drilling campaign within the next month to continue to unlock this value,” Mr Norregaard concluded.

The post Widgie Nickel (ASX:WIN) share price jumps 45% after IPO appeared first on The Motley Fool Australia.

Should you invest $1,000 in Widgie Nickel right now?

Before you consider Widgie Nickel, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Widgie Nickel wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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ASX 200 jumps as Evergrande confirms it will meet next interest repayment

relived woman hugs computer

The S&P/ASX 200 Index (ASX: XJO) was off to a weak start on Wednesday, sliding 0.78% to a 3-month low of 7,241.8.

But the broader market suddenly picked up before noon, rallying more than 1.2% from intraday lows to 7,330 at the time of writing.

The uptick is likely in response to some positive news out of China’s embattled Evergrande Group.

ASX 200 jumps on Evergrande repayment announcement

According to Reuters, Evergrande Group’s main unit, Hengda Real Estate Group Co Ltd, said that it will make a bond interest repayment on Thursday, 23 September.

The coupon payment is said to be worth US$83 million with an initial issue size of around US$2 billion, according to CNBC.

Despite the small win, Evergrande will continue to face stress tests with another 7-year dollar bond due next Wednesday, 29 September.

The real estate conglomerate has seen its liabilities balloon to over US$300 billion and has already fallen behind in payments to stakeholders including banks, building suppliers and holders of investment products.

On 7 September, Fitch Ratings downgraded Evergrande’s credit rating from ‘CCC+’ to ‘CC’, suggesting “a default of some kind as probable.”

Energy and materials bounce back

ASX 200 energy and materials shares were the most hard hit when Evergrande headlines sparked panic across global equity markets at the beginning of the week.

The S&P/ASX 200 Materials (INDEXASX: XMJ) and S&P/ASX Energy (INDEXASX: XEJ) index tumbled 3.74% and 2.99% respectively on Monday.

Both sectors are bouncing back strongly on Wednesday, up around 2.5%.

The energy sector is largely green across the board, led by gains from heavyweights Woodside Petroleum Limited (ASX: WPL), Santos Ltd (ASX: STO) and Oil Search Ltd (ASX: OSH).

ASX 200 iron ore miners are finally welcoming some buying activity after iron ore prices slumped below US$100 a tonne for the first time in 14 months on Monday.

The BHP Group Ltd (ASX: BHP), Fortescue Metals Group Ltd (ASX: FMG) and Rio Tinto Limited (ASX: RIO) share prices are up between 2.58% and 5.63%.

The post ASX 200 jumps as Evergrande confirms it will meet next interest repayment appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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