Investing Advice: The Netflix of China

Posted On June 6, 2018 12:22 pm

Netflix (NFLX) is the best performing stock in the S&P 500, up an astounding 88% so far in 2018. The best performing Initial Public Offering (IPO) of this year is iQIYI (IQ), which has gained whopping 91% in the less than 3 months since closing at $15.45 on first day of trading March 31. Today’s investing advice shines a spotlight on what people are calling the Chinese Netflix.

What two have in common is streaming; Netflix is the leader everywhere except China, where it doesn’t operate.  iQIYI has China, whose addressable market is almost equal to the total of nearly 200 countries where Netflix does offer its service.

Even though there is not much history to the IQ chart, you can start to see a pattern, with periods of consolidation that form bullish flags followed by bursts to highs.

The latest move was especially strong, taking shares above the $30 level. This might need some time to digest, but my investing advice is this: purchases in the $27-$28 level offer a good entry point, and will likely be rewarded in the near future.

 Related: Gain Leverage With This Options Strategy!

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Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.

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