Josh Brown defends buying Netflix at a time when it’s a hated stock

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Josh Brown defends buying Netflix at a time when it’s a hated stock

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By:

Wajeeh Khan

on
Apr 21, 2022

Ritholtz CEO Josh Brown took a small position in Netflix Inc.

He explained why this afternoon on CNBC’s “Halftime Report”.

Netflix shares are now down roughly 70% from their recent high.

Don’t own Netflix Inc (NASDAQ: NFLX). That seems to be the popular opinion ever since the streaming giant said it could lose up to 2 million subscribers this quarter. Still, Josh Brown is going against the current.

Brown took a small position in Netflix Inc

The CEO of Ritholtz Wealth Management agrees NFLX isn’t out of the woods yet, but sees it down 70% from its high as a reasonable point to hop onto the stock. Explaining why he took a small position in Netflix, he said on CNBC’s “Halftime Report”:


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I do think the stock has been very much de-risked. In January, it was trading double the earnings multiple as Disney. Now it’s on par. I’m not saying Netflix should have a premium to Disney, but there are a lot of reasons why it would and why it has historically.

According to Brown, at 20 times earnings, Netflix is a sensible buy, particularly for the long-term investors who can wait for things to get better for the California-based company.

Brown has confidence in Netflix management

The management at Netflix has a history of beating the odds, which, as per Josh Brown, is reason enough to believe that this time is not going to be any different. He added:

Moving to streaming, spending big on developing their own content, increasing price, going international; all these things that were initially panned by most Wall Street analysts, almost every time Wall Street was dead wrong and Netflix did the right thing.

Brown recalled that Disney – the next big shot in streaming, is not even half the size of Netflix so far. He agreed that it’s a tough business and things are bad, but reiterated that Netflix will eventually get it under control.

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