I Know First Review

Netflix, Inc. is a provider of Internet television network. The Company has over 69 million streaming members in over 50 countries. Its members can watch more than two billion hours of television (TV) shows and movies per month, including original series, documentaries and feature films on Internet-connected screen.

I Know First supplies financial services, mainly through stock forecasts via their predictive algorithm. The algorithm incorporates a 15-year database and utilizes it to predict the flow of money across 2000 markets. The self-learning algorithm uses artificial intelligence, predictive models based on artificial neural networks, and genetic algorithms to predict money movements within various markets.

I Know First wrote a Seeking Alpha article about Netflix on January 9th, 2015, in accordance to the algorithmic signal.  The article argued that by expanding the market more into European countries, and by adding more new and original content, the company was bullish, despite having fallen 20% in the last quarter. Since that article was published Netflix had offered one of the best returns in the tech industry by increasing  133.13%.

The majority of Netflix’s success over the course of the last year comes from them successfully spreading around the globe. With subscribers in 60 countries, the streaming service has now hit every major global market with one major exception: China.

Netflix has similar goals for 2016. By the end of the year, CEO Reed Hasting is hoping that Netflix will have reached every nation in the world. This is definitely an ambitious task, however so was expanding so much in 2015.

The global expansion gives Netflix a huge advantage over their rival Amazon.  Amazon operates in a handful of places overseas, but they aren’t trying to match the ambition of Netflix.

The other huge edge Netflix has received that will continue to work in their favor is all the original content. They have 24 shows on tap, many of which have been award-winning shows. They also released a handful of new shows to critical acclaim in 2015. All of these shows will be back in 2016, as well as 31 brand new shows. The original content alone has raked in billions of dollars last year, and it’s expected to produce even more this year.

Forecast

I Know First published a bullish forecast on Netflix. The three-month and one-year forecasts for Netflix are included. The 3 Month period has a signal of 30.60 and predictability of 0.37 and for the 1 Year period has a signal of 49.72 and a higher predictability of 0.44 for the same time horizon.

When the I Know First’s Algorithm predicted the performance of Netflix for the period of January 9th, 2015  to January 9th, 2016. As we can see in the 1-year predictions IKF had a positive one. The stock went up 133.13% during this period. The overall package performed well, bringing returns to investors taking evenly investments in each of the positions recommended by the algorithm and managed to get 37.69% return for the long position and 19.70% for the short  in 1 year. If we compare it to the S&P500 performance of -6.79% the I Know First Average performed much better.