RiverPark Funds, an investment management company, released its “RiverPark Large Growth Fund” third quarter 2022 investor letter — a copy of which can be downloaded here. For the quarter, the RiverPark Large Growth Fund (the “Fund”) lost 3.3% – a bit better than the S&P 500 (-4.9% for the quarter) and about in line with the Russell 1000 Growth index (-3.6% for the quarter). Try to spare some time to check the fund’s top 5 holdings for you to have an idea about their best stock picks this 2022.
In its Q3 2022 investor letter, RiverPark Large Growth Fund 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 a $129.5 billion market capitalization. Netflix, Inc. (NASDAQ:NFLX) delivered a -51.69% return since the beginning of the year, while its 12-month returns are down by -56.47%. The stock closed at $291.02 per share on October 25, 2022.
Here is what RiverPark Large Growth Fund has to say about Netflix, Inc. (NASDAQ:NFLX) in its Q3 2022 investor letter:
“NFLX shares gained after the company exceeded its 2Q guidance in July (losing less than one million subscribers against its two million loss guidance) and guided to a better-thanexpected one million additional subscribers for 3Q. Investor focus has turned toward the opportunity from NFLX’s launch of its ad-supported subscription tier and management’s crack down on password sharing; both initiatives have the potential to drive subscriber growth and higher margin revenue dollars.
Even with subscriber volatility, we believe that 2022 is an inflection year for Netflix as the company became FCF positive during 1H22 and should remain FCF positive for the foreseeable future (management guided to $1 billion FCF for 2022). A combination of its strategic initiatives, price increases and a stabilization of content investments should position the company for at least high-single digit annual revenue growth while driving improved operating margin in excess of 25% over the next few years (revenue grew 19% for 2021 and operating margin was 21%, up from 10% in 2018). In addition to its growth opportunities in TV and movie streaming, the company recently launched a mobile gaming service that opens an additional $100 billionplus market for future growth. We also believe that the stabilization of content spend should allow the company to scale its annual free cash flow (which can be used to retire debt, accelerate growth and/or return to shareholders).”
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Our calculations show that Netflix, Inc. (NASDAQ:NFLX) ranks 19th on our list of the 30 Most Popular Stocks Among Hedge Funds. Netflix, Inc. (NASDAQ:NFLX) was in 95 hedge fund portfolios at the end of the second quarter of 2022, compared to 109 funds in the previous quarter. Netflix, Inc. (NASDAQ:NFLX)delivered a 36.05% return in the past 3 months.
In October 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 Q3 page.
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Disclosure: None. This article is originally published at Insider Monkey.
