Author Archives: Scalper1

Netflix U.S. Subscriber Targets Are Too Aggressive, Analyst Says

Wall Street’s consensus estimate for Netflix ( NFLX ) domestic subscriber growth this year appears too aggressive, ITG Investment Research analyst Corey Barrett said in a report Monday. International subscriber growth estimates, on the other hand, look conservative, he said. “The net effect of slowing domestic churn improvements and gross addition velocity is likely to drive domestic streaming net subscriber additions below consensus in 2016,” he said. ITG is modeling Netflix to add 4.4 million U.S. subscribers this year, vs. the consensus estimate of 4.8 million. For 2017, ITG forecasts Netflix to add 3.8 million domestic subscribers, vs. consensus views of 4.5 million. Also, the percentage of Netflix domestic gross subscriber additions that have had the service before increased to 65% in Q4, up from 55% in Q4 2013. The pool of “Netflix-nevers,” people who have never been Netflix subscribers, is rapidly shrinking, he said. But Netflix’s international growth prospects are underappreciated, Barrett said. ITG predicts that Netflix will add 15.6 million net new international subscribers in 2016, above the consensus estimate of 14.4 million. For 2017, ITG expects Netflix to add 15.4 million international subscribers, vs. consensus views of 14.5 million. “We believe the company can leverage the scale advantage and apply the content expertise it has domestically to its international markets, creating a significant competitive advantage in international markets,” Barrett said. “We view Netflix as the future of global video distribution, but believe Netflix is more likely than not to fall short of investor expectations for 2016 subscriber growth.” Netflix ended 2015 with 74.76 million streaming video subscribers worldwide. Of those, 44.74 million, or 60%, are in the U.S. Netflix is having a big impact on the traditional TV business in the U.S. Last year, Netflix accounted for about half of the overall 3% decline in TV viewing time among U.S. audiences, according to a new study by Michael Nathanson of MoffettNathanson, Variety reported . RELATED: Surveys Show Netflix Winning In U.S., Slow Going In Japan .  

Weekly ETF Asset Round-Up: Equity Tops, Bonds Lag

Last week, the U.S. economy injected a fresh lease of life into the market, which has lately been troubled by Chinese hard landing fears, stretched equity valuations, oil price worries and some downbeat global economic data. The bulls have once again taken the center stage mainly because of an oil-rebound, though uncertainty is prevalent. Let’s take a look at the ETF asset flow of last week to understand the changing perception of investors. Improvement in the U.S. job scenario, inflation, manufacturing, construction spending, and housing and consumer spending data along with a spike in oil prices resulted in huge money inflows into the U.S. equity funds last week as per etf.com (as of March 3, 2016). Asset Gainers As a result, the SPDR S&P 500 Trust ETF (NYSEARCA: SPY ) , an ETF that resembles the S&P 500 index, saw inflows of nearly $1.76 billion last week. This took the fund’s asset base to around $176.7 billion. The return of risk-appetite was also validated by asset gains in the junk bond ETF space. The space has long been downtrodden. This was because that this segment has huge exposure in the energy market and includes debt issued when oil prices were at lofty levels. Oil prices slid in early 2016, putting energy companies on the verge of default and pressure on junk bonds. However, recent risk-on sentiments in the market and an oil price recovery pushed investors to pour more than $1.16 billion and $1.13 billion in the SPDR Barclays High Yield Bond ETF (NYSEARCA: JNK ) and the iShares iBoxx $ High Yield Corporate Bond ETF (NYSEARCA: HYG ) last week. Investors’ interest in risky assets may be back, but probably not in a full-fledged way. As much as $1.31 billion asset inflows into the gold bullion ETF, the SPDR Gold Trust ETF (NYSEARCA: GLD ) , revealed this. Gold demand has been surging lately on a safety bid. Investors’ continued interest in the yellow metal tells us that not only is volatility still present, the recent rally may also lose momentum any time soon. Inflation-protected bond ETF the iShares TIPS Bond ETF (NYSEARCA: TIP ) also gathered about $529 million in assets as the U.S. inflation outlook brightened on a relatively subdued U.S. dollar and recuperating energy prices. Asset Losers The fixed income world saw outflows with the iShares Short Treasury Bond ETF (NYSEARCA: SHV ) topping the losers’ list, having shed about $1.22 billion in assets. Just as the U.S. economy started delivering upbeat data, talks over rate hikes were back on the table. This will surely hamper investors’ interest in short-term Treasury bond ETFs as further Fed hikes would have the worst impact on the short-end of the yield curve. Another short-term bond ETF, the iShares 1-3 Year Treasury Bond ETF (NYSEARCA: SHY ) , saw a $330.9 million reduction in assets. Ultra short-term investment grade bond ETFs including the PIMCO Enhanced Short Maturity Strategy ETF (NYSEARCA: MINT ) and the SPDR SSgA Ultra Short Term Bond ETF (NYSEARCA: ULST ) also lost $422.4 million and $179.7 million in assets, respectively, last week. Apart from short-term bond ETFs, intermediate bonds products like the iShares 3-7 Year Treasury Bond ETF (NYSEARCA: IEI ) and the SPDR Barclays Intermediate Term Treasury ETF (NYSEARCA: ITE ) saw assets worth $374.8 million and $230.6 million, respectively, gushing out of the funds. Original Post

Strategic Asset Management Launches New Global Long/Short Fund

The long/short “hedged” fund was pioneered in the late 1940s in response to the economic tumult of the prior two decades. The idea behind it was to reduce exposure to the fluctuations of the “market” by partially offsetting long positions with short ones. If the stock picker was good, this meant the fund could outperform during bull and bear markets, and the downside during the latter would be mitigated. Strategic Asset Management’s First Fund Global long/short equity funds take things a step further than Alfred Jones, “hedged” fund originator, was able to take them in 1949, when investors were largely constrained by national borders. Rather than limiting themselves to U.S. equities, global long/short equity funds are open to investments from all over the world, and the Strategic Global Long/Short Fund (MUTF: SGFAX ), just launched on February 23, employs this strategy with a split “value/growth” approach. The new fund is advised by Strategic Asset Management, Ltd., a Cayman Islands corporation, and its portfolio manager is Mauricio Alvarez, Chief Executive Officer of the Adviser. This appears to be the company’s first U.S. mutual fund. The fund’s investment objective is twofold: First, to provide attractive returns through a combination of long-term capital appreciation and current income. Secondarily, to preserve capital in down markets. In pursuit of these objectives, the fund takes long and short positions in U.S. and foreign equities across all capitalization levels, with at least 40% of assets invested in companies generating a majority of their revenue outside the U.S. Global Long/Short Exposure The fund’s long exposure is expected to range from 100% to 140%, with the use of leverage; while its short exposure is expected to range from 0% to 40%. This will leave the fund with a relatively high beta compared to other long/short equity funds. The average beta, relative to the S&P 500 Index, for funds with a track record of 3-years or more is 0.53. On the long side, a “top-down” security selection process is used to identify undervalued equities and/or equities with favorable growth characteristics. On the short side, the fund focuses more keenly on firms with deteriorating growth. Currently, the fund is available in A-class shares only, which have a 1.97% net-expense ratio and a $1,000 initial minimum investment. The prospectus also refers to C-class shares, but doesn’t list a ticker symbol. Their intended net-expense ratio is 2.72%, and they have the same $1,000 initial minimum. For more information, view the fund’s prospectus .