Don Lato Netflix Inc. NFLX-Q DON'T BUY Nov 30, 2017

Impressed by last week's quarterly results. Cracking down on password sharing is generating more revenue. Innovating by launching ad-supported versions. Geographic expansion. Aggressive investment in content. Has become a big free cashflow story.

Officially classified as a consumer discretionary stock, but he considers it more akin to a utility. A relatively inexpensive indulgence for the value it offers. Difficult macro headwinds would have minimal impact.

Take out your cost basis (take some profits) and let it run.

Then buy a piece of it, a little, then buy more if it goes down. NFLX may be the best-growing stock in the market.

Meets a lot of his criteria but one -- it's not actually a capital-light business. Spends a lot on developing new content. A compounder. Well, and frugally, run. Investors would do well to read about the culture and the CEO. Dominates the space, market leader. Quite a bit of direct competition.

If you got in at favourable prices, stick with it. Strong company. One of the biggest mistakes investors make is that they "interrupt compounding unnecessarily" (paraphrased from Charlie Munger).

The price target was raised today. Is up 36% this year. It's a permanent compounder. They still own the streaming space, are #1. Looks great. Has so many tailwinds. Is recession resistant.

Is the leader in streaming. But you have to be a little wary of film accounting--you put the cash out front, but accountants will amortize that cost over time. So, earnings don't really reflect the true cash impact on an expanding portfolio of new releases. For a long time, NFLX was challenged on a cost basis, nor producing free cash. This is past and are now producing free cash.

They won the streaming wars already. RSI is 62, so not overbought. Is 3% below all-time highs. It's possible they could add user-generated content like YouTube. Don't expect this to perform as well as it has.

Was upgraded today. Up 38% this year. Operating margins were up 32% last quarter and EPS +25%. However, US growth was only 9%. So, there's lots of room to run internationally. Continues to like it. Expenses will this quarter though will content to come.

They will be the internet channel for the world. Is worth $542 billion. Don't double down because you might get an intra-day swing when you can buy. Is one of the best run companies in the world.

It reports Thursday. Price targets and expectations have risen so high, that they must deliver an excellent quarter or the stock will tumble. He's a little nervous though he expects a good quarter.