In an interesting coincidence rivals Netflix (NFLX) and Blockbuster (BBI) both received downgrades today. 
First Albany cut Netflix Inc. to “Neutral” from “Buy” to reflect weak industry subscriber additions.
Blockbuster was downgraded to “Hold” from “Buy” at Soleil. They think BBI’s Total Access program is going to cut into their profit and cash flow. Soleil said:
“We believe Blockbuster is positioning itself for the future evolution of the video rental business to downloading. However, the expansion of this program (Total Access) can be costly, particularly with customers who are aggressive users of the free coupon benefit.”
NFLX is trading around $21 a share with a P/E of 29.
BBI is trading around $6.30 a share with a P/E of 27.
So who’s the better bet?
Yesterday NFLX more than doubled it’s Q1 profit to $9.9M but it reduced its fiscal-year outlook, warning investors of looming competitors like ol’ Blockbuster. Blockbuster wants Netflix’s market share and when you’ve got a hungry dog just around the corner, you can count on increased pressure and dog-like tactics to take the No. 1 seat back. Keep in mind BBI also has Carl Icahn’s millions poured into it and that guy is ruthless at getting his investment back. So which one to buy? The Masters pick BBI this round, but how about forget both stocks and stick with oil. Better yet, just short the market, doomsday is coming. Don’t believe it, the DOW hit an all-time high of 12,803.84. A correction is coming people.
In an interesting coincidence rivals Netflix (NFLX) and Blockbuster (BBI) both received downgrades today.
First Albany cut Netflix Inc. to "Neutral" from "Buy" to reflect weak industry subscriber additions.
Blockbuster was downgraded to "Hold" from "Buy" at Soleil. They think BBI’s Total Access program is going to cut into their profit and cash flow. Soleil said:
"We believe Blockbuster is positioning itself for the future evolution of the video rental business to downloading. However, the expansion of this program (Total Access) can be costly, particularly with customers who are aggressive users of the free coupon benefit."
NFLX is trading around $21 a share with a P/E of 29.
BBI is trading around $6.30 a share with a P/E of 27.
So who’s the better bet?
Yesterday NFLX more than doubled it’s Q1 profit to $9.9M but it reduced its fiscal-year outlook, warning investors of looming competitors like ol’ Blockbuster. Blockbuster wants Netflix’s market share and when you’ve got a hungry dog just around the corner, you can count on increased pressure and dog-like tactics to take the No. 1 seat back. Keep in mind BBI also has Carl Icahn’s millions poured into it and that guy is ruthless at getting his investment back. So which one to buy? The Masters pick BBI this round, but how about forget both stocks and stick with oil. Better yet, just short the market, doomsday is coming. Don’t believe it, the DOW hit an all-time high of 12,803.84. A correction is coming people.
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