Netflix, Inc. (NASDAQ:NFLX)

JJMSpartan (99.15) Submitted: 10/30/2006 8:45:50 PM : Start Price: $18.87 NFLX Score: +263.52

Netflix almost single handedly has put Blockbuster into bankruptcy. That's a pretty good start for a online rental company. The stock has been beaten down due to the threat of VOD, which at the moment is more bark than bite. The issue with VOD as a true competitior for Netflix is really a misnomer - VOD is poised to compete with sales of physical DVD's, not with the rental market.

All the services offering VOD currently are offering it as a purchase the movie plan, not as a rental plan. Their costs are prohibitive due to the bandwidth requirements for the extremely large files necessare to deliver DVD-like quality, and they will only go up as the country makes the switch to High-Def. Think that 6 GB download of Star Wars is big of low-def, wait til you try to download the 35GB High-Def version. Finally, with a price of $12 for a movie, it's not competing against an average of $3 for a rental.

Netflix is poised to go higher - much higher.