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NFTRH+; A Post-Citron Look at ROKU (low priority)

Citron Research is a noted short seller. Basically, the guy (Andrew Left) hates everything. Sometimes he’s right and other times he’s either wrong or a given stock he shorts just does not care about the bearish case and goes up anyway. I have never shorted anything he has put the bear on but I was first alerted to the long-term bullish case for BB by reading his research a few years ago. I tend to trust a fundamental analysis who’s usually bearish on his rare bullish views more than a typical perma-bull telling me why I should like a given situation.

Here is Left’s case for ROKU. If you think that OTT (over the top) content is a new long-term trend in home entertainment, it might be worth a look.

Citron Changes Our Position on ROKU

As a person in the process of partially cutting the cord to cable (w/ Fire TV, mind you) I find the subject of streaming services interesting and potentially one of those ‘sea change’ investment areas people like to invest in. The risk is that this is a pure growth story and valuation is still theoretical and not a ‘value’ in literal terms. But Citron does note a valuation favorable to peers.

In doing a little research, this came in from 2016…

And this from 2017…

But from a 2018 article in Tech Hive

The head of Amazon’s Fire TV business, Marc Whitten, wishes Amazon was more forthcoming about Fire TV sales numbers.

Whitten says Amazon makes the most popular streaming players on the market, even if third-party metrics firms say that rival Roku has more market share. Based on Roku’s own reporting—which counted 19 million monthly users at the end of 2017, and 3.8 billion streaming hours in the third quarter—Whitten believes Amazon is doing better. But you’ll just have to take his word for it.

“In the U.S., U.K., Japan, and Germany, we are number one, by far, in both sales and usage, regardless of what Roku might say,” Whitten said in an interview during CES last week. “We’re unfortunately not super transparent in sharing our data out. I’ll just say we have the data and we’re pretty clear.”

But we are just a lowly chart service here at NFTRH+. Unfortunately, the chart does not have much history. I took a small position last week but the Citron spike will probably be undone and people should be patient. If I were to add (assuming the market backdrop is stable) I would not do so much above 36 (note support) and would not rule out a pullback to the 50 day moving average (currently 33.40).

roku

A reminder that chart based NFTRH+ updates are technical trade setup ideas, which may not be revisited as the buy, sell, stop parameters are already noted. They are meant as a starting point for your further research if interested. I will not personally buy every item highlighted and will sometimes sell (ref. Trade Log) any item that I do buy below target (assuming I’ve not stopped out or sold for some other reason), which is something I often do as a trader. Also please be aware that I am not a fundamental stock analyst. Due diligence is your responsibility.