By Noel Randewich
SAN FRANCISCO (Reuters) – For long-term shareholders of Netflix Shares of the video-streaming heavyweight have surged over 4,100% since the end of 2009, making it the S&P 500’s top performer over the past 10 years. Analysts mostly recommend investors keep buying the shares, even as the Los Gatos, California, company faces a surge in competition and questions about whether it can maintain its rapid user growth. (GRAPHIC: Top S&P 500 performers of the decade – https://fingfx.thomsonreuters.com/gfx/mkt/13/43/43/Top%20overall%20winne…) (GRAPHIC: Current S&P 500 constituents’ worst performers of the decade – https://fingfx.thomsonreuters.com/gfx/mkt/13/44/44/overall%20bottom.jpg) DECADE’S WORST LOSERS GRAPHIC
The dramatic rise of Netflix’s business and share price established the company as part of the so-called FANG quartet of high-growth stocks – along with Facebook But at the start of 2010, when mailing DVDs to customers was still a large chunk of Netflix’s business, the average analyst recommendation for the company was “hold,” making it one of the S&P 500 stocks least favored by analysts at that time. As well as being the top overall performer across the decade, Netflix was the S&P 500’s strongest annual performer in 2010, 2013 and 2015, gaining 219%, 298% and 134% in each of those years, respectively. (GRAPHIC: Top S&P 500 performers by year – https://fingfx.thomsonreuters.com/gfx/mkt/13/42/42/Top%20Winners%20by%20…) The only other S&P 500 component leading the index more than once on an annual basis over the decade was chipmaker Advanced Micro Devices Under Chief Executive Lisa Su, who took over in 2014, AMD stopped losing money and is expected by analysts to expand its bottom line by over 40% in 2019, according to Refinitiv.
Following its stellar stock market performance, Netflix is now struggling with slowing subscriber growth, ballooning costs to produce content and new competition from Walt Disney The S&P 500’s second-strongest performer of the decade has been electronic bond trading system operator MarketAxess Holdings Inc In ninth place is Ulta Beauty Investors buying the stocks most highly rated on average by analysts at the start of the decade, and holding them through 2019, mostly would have done well. But investors buying and holding the stocks least liked by analysts at the end of 2009 also would have fared well. (GRAPHIC: Analysts’ top picks at the start of the decade – https://fingfx.thomsonreuters.com/gfx/mkt/13/39/39/Analyst%20Top%20Picks…) Among current S&P 500 components, Incyte As the decade nears its finish, just one stock in the S&P 500 has an average analyst rating of “sell”: Franklin Resources (Reporting by Noel Randewich; editing by Alden Bentley, Megan Davies and Dan Grebler)