Diamonds and Dogs

4/17/18

Netflix (NFLX) shares are on fire. The stock is up 9% to new highs following better than expected earnings. Top-line sales rose 50% year over year to $3.7 billion. The streaming-video giant added 1.96 million net new subscribers in the U.S. along with 5.46 million new international subscribers. These results were 17% ahead of management's guidance targets. Netflix also raised guidance for the current quarter. A slew of upgrades with price targets ranging from $313 up to $420.

Good news, bad news. Goldman Sachs (GS) reported blow out earnings this morning, but after initially rallying, the stock is lower by 2%. Earnings came in 24% higher than expectations as revenue rose 25% to $10.04 billion. Return on equity came in at 15.4%, a five year high. Book value increased by 3.2% to $186.73. Goldman also raised their dividend 6.7% to $0.80/share. The bad news, the company said they would not be buying back any of their stock in the second quarter. Does that mean the stock is overvalued? Investors seem to think so.