Stocks Mixed Again As Netflix and eBay Jump After Hours

What's Carl Icahn got to do with it? Two of his faves moved up again.

Jan 22, 2014 at 10:00PM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Stocks finished mixed yet again today as earnings season heated up, and investors mulled the results of the all-important holiday season. The Dow Jones Industrial Average (DJINDICES:^DJI) finished down 41 points, or 0.3%, primarily because of IBM's 3.3% drop on a poor earnings report last night, while both the Nasdaq and S&P 500 gained modestly. So far this season, earnings beats have been below historical averages, but revenue beats have been above that long-term mark, a perhaps promising sign as revenue growth had been slow in recent quarters as companies cut costs to boost profits. With the market's P/E ratio significantly above its historical average of 15, however, investors may need to see a solid jump in profits to justify sending the market any higher.

After hours today, investors were delighted by strong reports from two big brand names. First, Netflix (NASDAQ:NFLX) shares spiked 18% as its quarterly report once again blew expectations out of the water, sending the stock to another all-time high near $400. Subscriber growth, a key figure for the video-streaming service, was especially strong, as the company added 2.3 million U.S subscribers in the quarter, bringing the grand domestic total to 33.4 million, or 44.4 million when its international customers are added in. The home-entertainment company saw earnings per share jump more than six times from a year ago, to $0.79 up from $0.13, which easily eclipsed estimates of $0.66. Sales of $1.18 billion were essentially in line with expectations, while the company projected an EPS of $0.78 for the current quarter, also matching expectations. Though this report was certainly good news for Netflix investors, the stock trades at a forward P/E of 100, and it may be worth questioning how long the company can keep up this torrid growth rate, even with its indisputable brand advantage in the video-streaming industry.

Elsewhere, eBay (NASDAQ:EBAY) was getting a lift, as the Internet auctioneer saw its shares rise 5% after hours on its earnings report and news that Carl Icahn has acquired a 0.8% stake in the company and is urging it to spin off PayPal, a development that seemed to be the primary reason for the stock's jump. Per-share profits of $0.81 beat estimates by a penny, though guidance for the current quarter disappointed, as the company sees EPS of $0.65-$0.67 on estimates of $0.72. Meanwhile, Icahn said he has nominated two of his employees to serve on eBay's board of directors and that he submitted a proposal to separate the company form PayPal. eBay's board of directors responded by saying it routinely assesses its strategic direction and does not believe that breaking up the company is the best way to maximize shareholder value. Still, Icahn is an investing wizard and a well-known noisemaker on Wall Street, recently making headlines for his demands that Apple buy back $150 billion of its stock, so this is likely not the last time we hear about this proposal.

Netflix isn't done yet
You know cable's going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple.

Fool contributor Jeremy Bowman owns shares of Apple. The Motley Fool recommends and owns shares of Apple, eBay, Google, and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

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