4 high fly­ing stocks that could fly higher in 2016

Financial Mirror (Cyprus) - - FRONT PAGE -

Net­flix Inc. (NASDAQ: NFLX) has been one of the dar­ling stocks in the tech space for the past five years. At the end of the past decade, the stock traded a lit­tle shy of $10 a share. At the end of Oc­to­ber this year, the stock logged all-time highs of $123, and it cur­rently trades just off th­ese highs. On the one hand buy­ing high is not gen­er­ally rec­om­mended. On the other hand, there is no ma­jor threat to Net­flix’s sta­tus as king of stream­ing, at least not cur­rently. Ama­zon is the run­ner up at 13% mar­ket share to Net­flix’s 36%, but Net­flix may be grow­ing too quickly for Ama­zon to catch up.

Net­flix has re­vamped its tech­nol­ogy to make it more ac­ces­si­ble from a band­width per­spec­tive, and it just pulled off a suc­cess­ful Ja­panese launch launch, some­thing that crit­ics sug­gested was go­ing to be a big ask given the cur­rent state of the Ja­panese econ­omy. With a fo­cus on orig­i­nal con­tent, sports pro­gram­ming and in-house movie pro­duc­tion slated for the first half of next year, ex­pect Net­flix to spear­head the sub­scrip­tion-based on­line con­tent space for the fore­see­able fu­ture. It is an ex­pen­sive stock, but not un­jus­ti­fi­ably so.

Walt Dis­ney Co. (NYSE: DIS) suf­fered a few down­grades last quar­ter, as losses pri­mar­ily re­lated to ESPN put pres­sure on expectations. ESPN though is still the dom­i­nant force in live sports pro­gram­ming in the United States, and it looks set to hold onto its dom­i­nance for a long time. The re­vamped Star Wars fran­chise is al­ready set to bring in more than $2 bln on the back of the lat­est movie’s ticket sales alone, and mer­chan­dise, spin-offs and amuse­ment park as­so­ci­ated rev­enues prob­a­bly will dou­ble this num­ber.

Not to men­tion the fol­low-up movie, set for release early 2017. Dis­ney is one of the world’s pow­er­house brands, and at its cur­rent 15% dis­counted price on this year’s highs, looks to be a strong value can­di­date as we head into 2016.

Am­gen Inc. (NASDAQ: AMGN) is one of a num­ber of com­pa­nies in biotech that ben­e­fited from the strength in the sec­tor over the past half-decade, but un­like many oth­ers, it hasn’t suf­fered too much of a cor­rec­tion dur­ing the lat­ter half of this year. This comes de­spite a num­ber of its key rev­enue gen­er­a­tors fac­ing biosim­i­lar com­pe­ti­tion.

The com­pany hiked its div­i­dend by 27% last week and expects to buy­back be­tween $2 bln and $3 bln through­out 2016.

From a purely quan­ti­ta­tive per­spec­tive, this makes the biotech be­he­moth an at­trac­tive ex­po­sure for 2016. Add in the first insight into the per­for­mance of its head­line PCSK9 in­hibitor, Repatha, in a car­dio­vas­cu­lar in­di­ca­tion sched­uled for early 2016 and top line for its sec­ondary po­ten­tial block­buster ro­mosozumab ex­pected June 2016, and we’ve got an ex­cit­ing year ahead for Am­gen.

Cit­i­group re­cently listed Face­book Inc. (NASDAQ: FB) as one of its so-called all-weather stocks, those that have out­per­formed the S&P across all four pre­de­fined phases of mar­ket move­ment dur­ing 2015. The com­pany re­cently an­nounced it had reached 1.55 bln monthly ac­tive users, as well as 900 mln What­sApp and 400 mln In­sta­gram users. In the third quar­ter, for the first time, 1 bln users used the plat­form daily.

The so­cial me­dia gi­ant gen­er­ated $4.3 bln rev­enues across that quar­ter and expects to re­port even higher num­bers for the cur­rent pe­riod.

Video views are dou­bling quar­ter over quar­ter. Mo­bile use is grow­ing, and Face­book has achieved a seam­less tran­si­tion from desk­top to hand­held as far as its ad­ver­tis­ing rev­enues are con­cerned. Com­par­isons with for­mer play­ers in the space, such as MyS­pace and Friend­ster, have be­come moot. De­spite claims that Face­book has be­come “un­cool” by crit­ics, user in­ter­ac­tion across prac­ti­cally all de­mo­graphic ranges is at all-time highs.

Zucker­berg’s abil­ity to spot the next so­cial trend like he did with In­sta­gram and What­sApp, cou­pled with Face­book’s ever deep­en­ing pock­ets, po­si­tions the com­pany for fur­ther growth dur­ing 2016. Amaz­ingly, there is still up­side po­ten­tial at its cur­rent $300 bln mar­ket cap.

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