5 Best News and Digital Media Stocks To Buy

1. Netflix, Inc. (NASDAQ:NFLX)

Number of Hedge Fund Holders: 89

Ranking 1st on our list of the best entertainment stocks is Netflix, Inc. (NASDAQ:NFLX). On January 23, Netflix, Inc. (NASDAQ:NFLX) reported a Q4 GAAP EPS of $2.11, missing estimates by $0.11. The revenue increased 12.5% year-over-year to $8.83 billion, outperforming Wall Street expectations by $120 million. Paid subscriptions for global streaming reached 13.12 million, marking a 12.8% year-over-year increase and totaling 260.28 million.

According to Insider Monkey’s fourth quarter database, 89 hedge funds were bullish on Netflix, Inc. (NASDAQ:NFLX), compared to 102 funds in the last quarter. Ken Fisher’s Fisher Asset Management is a prominent stakeholder of the company, with 4.12 million shares worth $2 billion. 

RiverPark Large Growth Fund stated the following regarding Netflix, Inc. (NASDAQ:NFLX) in its fourth quarter 2023 investor letter:

“Netflix, Inc. (NASDAQ:NFLX): NFLX was a top contributor in the quarter following strong third quarter earnings and fourth quarter guidance driven by better-than-expected subscriber adds (+8.8 million versus estimates of +6.1 million). The company’s subscriber growth continued to accelerate following the company’s crack down on password sharing, and the rollout of the advertising supported subscriber offering known as the Ad Tier. ARPU came in below expectations, but management announced price increases in the US, UK and France effective immediately. NFLX guided full year 2023 operating margins to the “high end” of the prior guidance, guided 2024 operating margins to a range of 22-23%, ahead of investor expectations of 22%, and raised 2023 free cash flow guidance from $5 billion to $6.5 billion.

The recent re-acceleration of subscriber growth, plus price increases on premium memberships and a stabilization of content investments, should position the company for low double digit annual revenue growth over the next few years while driving improved operating margin to more than 25% (revenue grew 8% for 3Q23 and operating margin was 22.4%, up from 13% in 2019). We also believe that the stabilization of content spend should allow the company to continue to scale its FCF.”

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