Bill Ackman Is Buying Netflix. Should Investors Load Up, Too?
Shares of Netflix are still down 30% over the past 12 months, but there are plenty of reasons for investors to be optimistic.
Overview
Bill Ackman and his hedge fund, Pershing Square Capital Management, recently disclosed that it increased its stake in Netflix (NASDAQ: NFLX). The last time Ackman's funds owned Netflix, all the way back in 2022, the position was exited at a hefty loss.
The new thesis is simple: Netflix is officially the champion of the streaming wars, and the entertainment company is now positioned to grow even more. Is he right, and should retail investors follow suit?
Details
The case for buying Netflix is strong. If we look at Netflix's valuation and price, the stock has fallen more than 30% over the past 12 months, bringing down its forward and trailing P/E ratios to 24. The streaming giant is trading at less than 7 times its sales. The metrics are appealing right now, particularly at a moment when its profitability is improving and its ambitions are expanding.
Source
Originally published at www.fool.com.