You Best Not Miss | The Daily Peel | 10/20/22

Market Snapshot

Netflix has been keeping receipts on the doubters proclaiming Disney and Amazon the new kings of streaming. And they proved they still have the crown Tuesday.

After a worrying bout of subscriber losses this year, it bounced back with 2.4 million new sign-ups in Q3. A new ad-supported tier could bolster further growth.

Elsewhere in the market, stocks saw modest losses after gaining to start the week.

At the close, the Dow sank 0.33%, the Nasdaq dropped 0.85%, and the S&P fell 0.67%.

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Let’s get into it.

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What's Ripe

Netflix ($NFLX) — Anyone who’s been mooching off of someone else’s Netflix account has been worrying for months that a crackdown on password sharing is coming.

The company shared some details about its plans on that front, and there’s good and bad news.

The bad news is that allowing password sharing will cost you. But the good news is that it won’t cost as much as a regular subscription.

$NFLX was up 13.09% by the end of the day.

United Airlines ($UAL) — It’s been a long road back for the airlines from the near-death experience of C-19, but travel demand is rebounding in new ways.

Traditional business travel is still well below pre-pandemic levels, but the burgeoning remote work class is fueling demand in its wake.

According to CEO Scott Kirby, “It wasn’t money that constrained people from travel. It was time.”

$UAL was up 4.97% by the end of the day.

What's Rotten

Carvana ($CVNA) — It’s getting even uglier at Carvana after a negative analyst report sent shares plummeting, bringing it down to -93% YTD.

There doesn’t seem to be a clear way out of the mess, with lagging consumer demand keeping huge inventories sitting in lots.

It’s burning cash at a concerning rate, and whispers of bankruptcy are starting to get louder.

$CVNA ended the day down 18.53%.

The Boston Beer Company ($SAM) — $SAM had solid momentum coming out of 2021 after posting strong revenue growth, but it has lagged this year.

The maker of Samuel Adams, Twisted Tea, and Angry Orchard has had to deal with rabid competition in the space, along with margin pressure from increased costs.

Many believe the stock has too much future growth priced in, which largely drove the selling Wednesday.

By the end of the day, $SAM was down 5.04%.

Thought Banana

Congress Is Too Good at Investing — Members of Congress get access to all kinds of juicy info that can move stocks significantly. Trading on it can net them tendies galore.

You’d think there’d be a system in place to ensure these people only maintain passive investments or are somehow walled off from profiting off of insider info.

Apparently, there are far less barriers than you’d think.

• The NYT analyzed trading activity from Congresspeople and their families and found significant conflicts of interest
• These included snapping up drug company stocks ahead of major FDA approvals and selling Boeing before a damning report on its 737 MAX was released
• The STOCK act allows members of Congress to trade as they please, as long as it’s not on inside info…but that’s really hard to prove

The penalty for failing to report a trade on time? Just 200 bones.

That’s just not enough of a disincentive to prevent this from happening. Tighter restrictions seem like the obvious solution.

If you ask me, they should have to put their assets into a blind trust or at least move them into ETFs or something that’s more passive.

In the meantime, the apes will have to continue competing with an informational disadvantage.

Wise Investor Says