Is Something Burning?
Kyle is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
My 16-year old son recently said something interesting which forced me to do some homework. When I suggest that people investing should spend at least one hour a week for each stock they own, or stocks they are considering a potential buy or sell move, I’m not just talking about research. As much as I love charts, I like to think that I also have one of those obnoxiously cold stethoscopes on the back of society.
I don’t own Netflix (NASDAQ: NFLX), and for those of you that do, I hope you have overcome the motion sickness the stock has caused over the past year. Typically I won’t talk about a stock that trades in a 52-week range of $74-$304, unless I feel the intense burning from the perspective of a buy-and-hold investor. The 3-month move has been special, but I am considering no move whatsoever, other than to watch what happens next, and it probably won’t be available for instant viewing.
So back to the incredibly introspective quote from a potential future subscriber of some type of streaming entertainment, “Dad, Netflix doesn’t offer much for instant viewing anymore.” Now because I am painfully observant and unlike some folks I like to look beyond the shiny objects festooned between myself and a potential position with a stock, I won’t be going near Netflix.
With the recent news that Verizon (NYSE: VZ), and Coinstar (NASDAQ: CSTR), have formed a streaming alliance, it appears as though Netflix is directly in the crosshairs of yet another entertainment sniper. I have a long position with Verizon, and I have to admit, it’s primarily for that rich creamy filling the 5.3% dividend yield serves me every quarter. But I am now considering adding to that position if these two can come up with a cool name and an eye-catching ploy, something a little better than Redbox. I have no position with Coinstar and not just because my debit card information was compromised the one time I used it. I just haven’t initiated a stalking position and started with my Coinstar homework yet.
While Netflix CEO Reed Hastings meanders about, oblivious to the point where he resembles a cartoon character with their pants on fire, other companies are changing with the times and innovating, creating revenue streams outside their normal business models. So not only do we have the myriad choices that would cause any ADHD sufferer’s head to explode, the options that Netflix offers are shrinking.
While the dust gathers on the Netflix DVDs I’ve had since September, I am considering my entertainment and investing options with Amazon, Hulu, HBO GO, and I will keep a watchful eye on the union of Verizon and Coinstar to see what they have to offer. The market appears to be getting saturated, and Netflix is soaked. And that’s probably a good thing if Reed’s pants are actually on fire.
Motley Fool newsletter services recommend Netflix. The Motley Fool has no positions in the stocks mentioned above. kmet312 owns shares of Verizon Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.