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The "Next Warren Buffett" Says Netflix Is A Buy

After a projection of slowing subscriber growth, the stock price of Netflix Inc (US:NFLX) declined by 42% off its all-time high.

The sentiment of smart money for Netflix Inc (US:NFLX) remained steady in the last 12 months.

Netflix Inc has 3,056 institutional owners who are long on the stock and 14 institutional investors are short. 62 other owners held both long and short – likely to hedge their positions.

Pershing Square Capital, the hedge fund managed by Bill Ackman, bought more than 3.1 million shares of Netflix after the earnings dip. The purchase gives Ackman, the practitioner of Warren Buffett’s investment philosophy, a stake worth more than $1 billion, making him one of Netflix’s top 20 shareholders.

“The opportunity to acquire Netflix at an attractive valuation emerged when investors reacted negatively to the recent quarter’s subscriber growth and management’s short-term guidance,” Ackman wrote in his letter.

The institutional ownership in NFLX rose from 450 million shares in December 2020 to 459 million shares at the end of 2022, which is an increase of 2%. At Trade Algo, we analyze through thousands of data points to uncover top investment ideas. For example, the boom of electric vehicles led lithium prices to double over the past year. There are excellent opportunities in this industry. So, we scour through the universe of stocks to select the top 10 EV stocks that are poised to be the next Tesla with outsized returns. We do this analysis every day, and we will look at institutional investors’ activities in Netflix Inc (US:NFLX).

Pershing Square GP Bill Ackman

According to Trade Algo’s database, Vanguard Group held the largest position in Netflix Inc (US:NFLX) with 33,520,926 shares worth $20,459,162,000. Capital Research Global Investors is second with 29,151,099 shares worth 17,791,952,000. The next largest is BlackRock with 27,044,453 shares worth $16,506,313,000. The rest of the group includes Growth Fund of America, Capital International Investors, FMR, Price T. Rowe, State Street, Capital World Investors, Vanguard Total Stock Market Index Fund, Vanguard 500 Index Fund, Baillie Gifford & Co, AMCAP Fund, Geode Capital Management, and Investment Co. of America. 

As for the largest call position, Susquehanna International Group holds 5,583,000 shares worth $3,407,528,000. Citadel Advisors holds the second-largest position with 4,314,700 shares worth $2,633,434,000. The remaining are Jane Street Group, CTC, IMC-Chicago, Wolverine Trading, Simplex Trading, PEAK6 Investments, Citigroup, and BNP Paribas.

Citadel Advisors holds the largest put position in NFLX with 4,145,000 shares worth $2,529,859,000. As for the second-largest put position, Susquehanna International Group has 3,808,600 shares worth $2,324,540,000. CMT Capital Markets Trading comes in third with 2,149,800 shares worth $1,287,859,000. The rest of the group includes CTC, Millennium Management, Jane Street Group, UBS Group, IMC-Chicago, Parallax Volatility Advisers, Simplex Trading, BNP Paribas Arbitrage, 36 South Capital Advisors, and Wolverine Trading. 

Technology Crossover Management has the largest portfolio allocation in NFLX with 71%. Barton Investment Management is second with 22%. Technology Crossover Management VIII has a portfolio allocation of 15%. The rest of the group is Matrix Capital Management, Blacksheep Fund Management, Immersion Capital, SRS Investment Management, 36 South Capital Advisors, Tekne Capital Management, Strategy Capital, Ensemble Fund, Soma Equity Partners, Ensemble Capital Management, Teewinot Capital Advisers, and Fernbridge Capital Management.