Daily Gains Letter

Netflix Stocks

Why Blue-Chip Dividend Stocks Always Make Sense

By for Daily Gains Letter | Apr 10, 2015

Blue Chip Dividend StocksIn the first quarter, we witnessed a market shift back to higher-beta technology, growth, and small-cap stocks as investors searched for higher potential profits. Yet while this investment strategy makes sense, you also need to make sure your portfolio is diversified across numerous sectors and stocks with varying market caps, including dividend-paying stocks.

Dividend stocks may not have the upward explosiveness of smaller technology stocks or the large-cap momentum stocks like FaceBook, Inc. (NASDAQ/FB), Twitter, Inc. (NYSE/TWTR), and Netflix, Inc. (NASDAQ/NFLX); but you know the large-cap blue-chip dividend stocks found on the Dow Jones Industrial Average and S&P 500 offer long-term confidence for investors.

Whether you are starting out on your investment plan or are a seasoned investor, you should always have some funds stashed away in these safer and proven dividend stocks. I would rather play my safe money in the blue-chip dividend stocks than bonds in the long-term.

Proven Dividend Stocks to Watch

When I talk about the proven long-term dividend winners, I’m talking about the likes of Wal-Mart Stores, Inc. (NYSE/WMT), The Procter & Gamble Company (NYSE/PG), and Colgate-Palmolive Company (NYSE/CL). Take a look at their long-term charts, and you’ll see what I mean. These companies sell goods that are always needed by consumers, whether in good times or bad. They also have the financial resources to withstand economic weakness.

In cases when there have been operational issues with these dividend stocks, they generally have been able to pull out of it and rally. Two such companies that faced major issues but managed to subsequently recover are McDonald’s Corporation (NYSE/MCD) and General Electric Company (NYSE/GE). If you … Read More

Netflix Successful, but Expensive; How to Invest with Less Risk

By for Daily Gains Letter | Mar 4, 2015

Invest in Overvalued StockThe third season of House of Cards will likely once again see a massive influx of new subscribers flow to Netflix, Inc. (NASDAQ/NFLX). The company is sizzling on the chart and is the “Best of Breed” in the video streaming market at this time. Netflix currently has about 57 million subscribers.

Having said that, my stock analysis shows that the top-heavy valuation will need to be fuelled by better top-line growth, especially from the international markets where Netflix is dominant. The company already offers its streaming service in about 50 countries, but it is aggressively aiming to expand into hundreds of countries.

Netflix Plans for Expansion

Netflix just announced it would be entering into the Cuban market, which I believe is still very raw, given the lack of communications infrastructure there. The view may be that as the country opens up its relationship with the United States, there will be improvements in its communications technology. With about 90 million potential Netflix subscribers in Cuba, the market is significant.

Of course, Netflix is also trying to do something many other U.S. media companies have failed to do so far, and that is to expand into the massive and highly lucrative Chinese media market. The problem is that Netflix will do it alone. Based on the extremely tough and regulated nature of content in China, it will not be an easy chore for the company. Just ask Google Inc. (NASDAQ/GOOG) and Yahoo! Inc. (NASDAQ/YHOO). My stock analysis suggests that any success in the Chinese market would be a bonus that could drive the valuation much higher…. Read More

Video Streaming Competition Comes Down to

Muted Retail Growth to Move Higher? How to Play the Sector Minus Risk

By for Daily Gains Letter | Feb 27, 2015

Retail Growth to Move HigherRetailers continue to fight for the limited dollar of the consumer. The retail sector is extremely competitive and success is contingent on the right strategy of attack, which means offering the right product mix, competitive pricing, and in the ultra-competitive apparel sector, it means keeping on top of the trends and consumer sentiment.

A good product today could be passé a year from now, as consumer sentiment changes rapidly.

Why Target Failed in Its Canadian Expansion

Target Corporation (NYSE/TGT) beat Wall Street estimates on Wednesday, despite recording a massive $5.1-billion charge after deciding to exit Canada in what has to be one of the biggest blunders in retail history. The reality is that it wasn’t the Canadian consumer sentiment that choked Target, but the company’s mistake in its expansion plans, the first outside of the United States.

Other major retailers, such as Wal-Mart Stores Inc. (NYSE/WMT), The Home Depot Inc. (NYSE/HD), Lowes Companies, Inc. (NYSE/LOW), The Gap, Inc. (NYSE/GPS), and Best Buy Co., Inc. (NYSE/BBY) to name a few, have managed to expand successfully in Canada after understanding the consumer sentiment there.

Target simply did a bad job in not only its expansion after buying up locations via its purchase of troubled Zellers, but also its exit. The company operated poorly in Canada and failed to grasp the consumer sentiment there. My view is that Target should’ve kept some of its own developed stores in good locations and made the experience better for the Canadian shopper. It didn’t, so here we are. Projected sales growth of 1.6% for FY16 doesn’t offer much comfort.

Retailers Stalling, but Could Edge Higher

The … Read More