Ed’s Daily Notes for January 23rd   Leave a comment

Fox Business: Netflix Surges 18% on 4Q Results, Outlook

Netflix (NASDAQ: NFLX) shares exploded higher in after-hours trading…after the online movie service blew past Wall Street’s expectations in every important category – earnings, revenues and new subscribers.

The shares surged as much as 18% to $392 after the company reported earnings per share of 79 cents, easily beating analysts’ forecasts of 66 cents.

Net earnings were $48.4 million, slightly above expectations of $48 million. And fourth quarter revenue rose 24% to $1.18 billion, another beat of the $1.17 billion forecast.

Also significant was Netflix announcement that the service added 2.33 million new subscribers last quarter while analysts had predicted 2 million. Netflix said it expects to add 2.25 million new subscribers in the first quarter.

I wonder why I even keep this stock on my watchlist. I love the company, but I will never own it if it keeps doing what I expect it to do. Darn them!

CNBC: Aetna could be forced out of Obamacare

Aetna CEO Mark Bertolini told CNBC on Wednesday that Obamacare has failed to attract the uninsured, and he offered a scenario in which the insurance company could be forced to pull out of program.

…He said that so far, Obamacare has just shifted people who were insured in the individual market to the public exchanges where they could get a better deal on a subsidy for coverage. “We see only 11 percent of the population is actually people that were firmly uninsured that are now insured. So [it] didn’t really eat into the uninsured population.”

For Obamacare to work better, it needs more flexibility and choice of insurance programs, Bertolini said. “We need to make it a lot more simpler for people. There needs to be more choice. When you get more choice, you make it more of a market and you get more people in the program.”

Translation: He wants the old system, where people could buy any kind of policy they want, combined with the individual mandate of Obamacare. I’m sure he would like that…

Bloomberg: China Manufacturing Index Signals Surprise Contraction

China’s manufacturing may contract for the first time in six months, adding to stresses in the world’s second-biggest economy, according to a gauge released by HSBC Holdings Plc and Markit Economics.

The preliminary reading of 49.6 for January in a Purchasing Managers’ Index (SHCOMP) released today was below a final figure of 50.5 in December and all 19 estimates of analysts in a Bloomberg News survey. A number above 50 indicates expansion.

…While Bank of America Corp. cautioned that figures may have been distorted by workers’ holidays ahead of the Lunar New Year, a manufacturing slowdown would add to strains that include elevated interest rates and the risk of defaults on high-yield investment products.

That last point about the Chinese New Year shouldn’t be ignored. That could explain the contraction entirely. However, even with that considered, it is clear that China has some issues.

I would still avoid China, and any China-related plays like Australia.

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Posted January 23, 2014 by edmcgon in Market Analysis, News, Stocks

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