Netflix, Inc. (NASDAQ:NFLX)

fundamentalsrock (33.51) Submitted: 11/3/2009 9:57:25 AM : Start Price: $45.75 NFLX Score: +65.20

Netflix has already turned Blockbuster from the darling of wall street to the guy on the street begging for a nickel. But that isn't why you should buy Netflix (its valuation has already baked in the fact that it is the King of mail order DVDs). Recognizing the next big transition to online movies rentals early, Netflix is the clear leader in online movie rentals and is poised to stay that way for a long time. Barring market entry from Google, I don't see anyone who could challenge netflix credibly (certainly not Apple or Microsoft). Moreover, its recommendations system is second to none, and a little known fact of this business is that good recommendations are the centerpiece of success (there are only so many "new releases" that one person will rent in a month, and those have lower profit margings/higher costs to Netflix). Those red boxes outside the grocery store will never compete with the vast selection and recommendations engine of netflix. This one only goes up for the foreseeable future.