Your 5 simple steps on how to invest in Netflix

Estimated reading time: 4 minutes

Netflix is one of the world’s leading entertainment services, sporting over 209 million paid memberships in over 190 countries and counting.

In Quarter 2 of 2021, the streaming company explains that Netflix’s revenue increased 19% year on year to $7.3 billion (R103 billion). While operating income rose 36% year on year to $1.8 billion (over R26.2 billion).

 “If we achieve our forecast, we will have added more than 54m paid net adds over the past 24 months.” Further stating, “which is consistent with our pre-COVID annual rate of net additions,” said Netflix. 

The company further forecasts that ARM (average revenue per membership) will grow roughly 5% year on year in the third quarter.

Considering this phenomenal product’s growth and its exciting forecasts, here is how to invest in Netflix.

How to invest in Netflix

  1. Find a good online broker

    When looking for a broker, you will need to consider the following:
    a. Market access
    b. Commissions and fees
    c. Types of investments available

    It is important to note, the best have low costs, simplicity, functionality, and support.

    BuyShares recommends the following two brokers for buying Netflix Shares:
    • Capital.com – Click here to register: Capital.com
    • Plus500 – Click here to register: Plus500

  2. Open your brokerage account

    After finding your online broker, you must open an online account to begin trading. You can do this by signing up with your already existing Facebook, Google or Apple account.

  3. Deposit money into your account

    When you buy shares, you will need to pay cash for them. This means you will need to deposit money into your account.

  4. Buy your shares

    After you have found a broker, opened an online account, and deposited the necessary money into your account, you are officially ready to begin investing in stocks. It truly is that simple.

    However, before investing, it is necessary to research the Netflix stocks and how much they cost.

    For example, Netflix shares began trading in May 2002 at an adjusted price of $1.21. In January this year, they sold at a new all-time high of $593 (just over R8 700). In simple English, this reflects an estimated gain of over 48,000%.

    Over recent months, the share price has traded in a range between $470 (an estimated R6 949) and $590 (just over R8 700) as the market weighs up the next move.

    Netflix was so successful in 2020 that it set a very high bar for itself for growth in 2021. The most recent figures for Netflix shares are as follows:

    For further information on Netflix’s financials, click here: https://ir.netflix.net/financials/financial-statements/default.aspx

  5. Track your position over time

    Once you have bought your stock, you should use the best portfolio management apps to follow it over time.

    Netflix is a company that prioritises growth and reinvests its profits to achieve that growth. For this reason, the company doesn’t currently pay a dividend. At some point in the future, Netflix may begin paying dividends – until then, the share is better suited to investors wanting capital growth rather than income.

    Considering the above-mentioned steps, be sure to take the step and consider investing in one of the world’s largest streaming companies.

What are your thoughts on investing in Netflix? Share your views in the comment section below.

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