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What the Netflix Upgrade Means For Mutual Fund Investors (NFLX)

Shauna O'Brien Mar 24, 2015

On Tuesday morning, Cantor Fitzgerald boosted its price target on Netflix (NFLX). Here’s what the upgrade means for mutual fund investors.

Inside the Analyst Move

Cantor Fitzgerald analysts Youssef Squali and Kip Paulson raised their price target on NFLX from $450 to $500. This new price target suggests a 14% upside from the stock’s current price. According to the analysts, Netflix is the winner in the unbundled TV world, as consumers are given the best “bang for the buck” with Netflix.

The analyst commented: “Pay TV packages at over $100/mo. are likely to start seeing pressure from consumers’ desire to unbundle, and from digital providers’ ability to offer attractive alternatives,” the analysts commented. “At $8.99/mo., Netflix offers access to one of the largest and lowest-priced online video content libraries, making it a top add-on for subscribers in an Internet TV world. In comparison, HBO Now is priced at $14.99/mo. Netflix spends more money on content than peers and boasts the greatest assortment of content.”

Goodbye Cable, Internet TV Is On The Rise

While cable prices remain high, several internet-focused TV services have been on the rise. Although Netflix’s competition has been increasing with existing services and the upcoming Apple TV content, the company is still in a good position to grow.

Yesterday, Netflix launched its service in New Zealand and Australia, allowing yet another region to access its service. It was estimated that 200,000 Australians have subscribed to the service.

Mutual Funds to Watch

Investors interested in NFLX may be interested in the funds listed below. These funds currently have the largest stakes in the company.

Symbol	Mutual Fund	Stake
PRGFX	VT. Rowe Price Growth Stock	1.70%
VTSMX	Vanguard Total Stock Mkt Index	1.65%
FCNTX	Fidelity® Contrafund®	1.48%

The Bottom Line

The funds listed above allow investors to gain exposure to NFLX while remaining diversified. Investors interested in Netflix may also be interested in Amazon (AMZN) and Time Warner Cable (TWC).

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