ClearBridge Investments: “Our Thesis for Owning the Netflix (NFLX) is Intact”

ClearBridge Investments, an investment management firm, published its “All Cap Growth Strategy” first quarter 2022 investor letter – a copy of which can be downloaded here. The ClearBridge All Cap Growth Strategy underperformed its Russell 3000 Growth Index benchmark in the first quarter. On an absolute basis, the Strategy had losses across seven of the eight sectors in which it was invested (out of 11 sectors total). The primary detractors of performance were the IT and communication services sectors while the sole contributor was the financials sector. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, ClearBridge Investments mentioned Netflix, Inc. (NASDAQ:NFLX) and explained its insights for the company. Founded in 1997, Netflix, Inc. (NASDAQ:NFLX) is a Los Gatos, California-based subscription streaming service and production company with an $88.7 billion market capitalization. Netflix, Inc. (NASDAQ:NFLX) delivered a -66.82% return since the beginning of the year, while its 12-month returns are down by -60.28%. The stock closed at $199.87 per share on May 03, 2022.

Here is what ClearBridge Investments has to say about Netflix, Inc. (NASDAQ:NFLX) in its Q1 2022 investor letter:

“After being a prime beneficiary of increased viewing patterns during the stay-at-home period of COVID-19, Netflix is recalibrating what a normal growth trajectory will look like as global economies fully reopen. The stock fell sharply after the company modestly reduced its net subscriber additions for the current quarter, calling into question its ability to continue to deliver double-digit subscriber growth.

We believe one of our edges as active managers is our long-term orientation and willingness to be both early and patient with additions to the portfolio. With Netflix, we remain convinced that our thesis for owning the stock is intact. While some fear the U.S. streaming market is becoming saturated, Netflix’s penetration of global broadband homes is still less than 50%, a figure that doesn’t even include the opportunity to attract more mobile-only smartphone users.”

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Our calculations show that Netflix, Inc. (NASDAQ:NFLX) ranks 10th on our list of the 30 Most Popular Stocks Among Hedge Funds. Netflix, Inc. (NASDAQ:NFLX) was in 113 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 106 funds in the previous quarter. Netflix, Inc. (NASDAQ:NFLX) delivered a -56.28% return in the past 3 months.

In April 2022, we also shared another hedge fund’s views on Netflix, Inc. (NASDAQ:NFLX) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.