Rolls-Royce 

The aerospace group has been the centre of attention since its share price collapse back when the pandemic initially broke out. Nowadays, the situation looks a lot better for Rolls-Royce (LSE:RR) with its recent announcement of a £307m operating profit. This is a huge increase from its £1.63bn loss last year. This improvement has been the result of good management decisions, as RR recently acted to cut costs in its civil aviation programme. 

The RR share price still looks cheap with a current P/E ratio of 2.87. This price could be a bargain if financial improvements continue.

However, the effects of another possible lockdown could be devastating for RR. The longer planes remain on the ground and any lengthening in production delay could see Rolls-Royce’s recovery efforts thwarted. 

Anglo American 

My second FTSE 100 index share is Anglo American (LSE: AAL). If I had to pick one share to beat inflation, I’m sticking with the multinational mining company. Raw material prices tend to increase during inflation, therefore companies that are commodity based can provide security for me. With a P/E ratio of 7.9 and an impressive financial performance in its most recent interim report, I think Anglo American looks undervalued. 

It’s important to note that Anglo American could suffer from the drop in the price of platinum as well as the rise of Covid-19 cases in China. China is one of the largest markets for raw material consumption.

Lloyds 

Lloyds (LSE: LLOY) is another share that has become a red-hot topic since the pandemic outbreak. The share price has increased by 62% over the last 12 months and has a P/E ratio of 6.66. 

In Lloyds’ most recent trading update, the UK bank reported underlying profits of £4bn – an amazing recovery from its £281m loss last year. Further, I expect Lloyds to continue this improvement as the UK housing market strengthens.

However, I’m sceptical of Lloyds’ plans to launch its property investment brand, Citra Living. The UK bank plans to create 50,000 homes by 2030 in partnership with Barratt Developments. If the housing market continues to hold steadfast then perhaps it will be a profitable venture. However, I think this is a bit risky for the current market. I would’ve preferred to see Lloyds play it safe and focus solely on its recovery. 

My outlook on these three shares

What attracts me to these FTSE 100 index shares is that they are all high-performing from a financial standpoint and they are all estimated to be undervalued with a P/E ratio of under eight. 

There are risks of future delays in production and housing market slumps due to the possibility of the pandemic re-emerging to its former highs. However, I think these three stocks are overall excellent recovery plays. 

The post 3 of the best FTSE 100 index shares to buy right now appeared first on The Motley Fool UK.

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John Town has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Its share price has performed very strongly recently, and over the past year. At the time I’m writing, it has risen by 19% today (3 August). While discoverIE continues to grow with new acquisitions in the US and UK, I’m slightly concerned with the recent share placing by the group. Here, I weigh up the pros and cons of discoverIE’s recent takeovers and examine if the share price will continue to rise.

discoverIE acquires Beacon and Antenova

Investor confidence in this FTSE 250 share today has followed the news that discoverIE announced the takeover of two new firms.

One of the companies discoverIE has acquired is Beacon for a cash consideration of £58.8m. Beacon is a US-based designer, manufacturer, and supplier of custom system on module (SOM) embedded computer boards and related software. Beacon supplies the medical, industrial, and aerospace & defence markets in the US and reported a strong revenue of £20.5m in the last financial year.

A separate acquisition has also been made for the company Antenova with an accepted offer of £18.2m. This UK-based company is a designer and manufacturer of antennas and radio-frequency (RF) modules. Antenova has been reporting strong growth, with sales this year expected to be around £8m.  

I have confidence that discoverIE can create further growth opportunities with these acquisitions. Both of these businesses have generated good operating margins of 20%. So based on the financial indicators, I am confident discoverIE will profit from these takeovers. 

Risks and concerns 

To raise capital for discoverIE’s ventures mentioned above, it has placed a total of 5.4m new shares. This generated £55m which was more than the original plan to raise £45m. The electronic component manufacturer said that this decision was made due to high investor demand. 

While investor confidence in this FTSE 250 share is encouraging, I’m concerned that this might cause possible problems down the line. The placement of shares could discourage existing shareholders as their shares will become diluted as a result. 

Further, the share price is extremely high at £1,232, at the time I’m writing. The price could very well be overvalued as it is carrying a high price-to-earnings ratio of 94.17. If I made an investment now, I could suffer due to a pullback in price in the near future. 

Will I be buying? 

Buying this FTSE 250 share does come with its risk. I think that with such a high P/E ratio this share is quite off-putting. I also question the value for money I will get on my shares as they have been diluted. 

However, dilution of shares isn’t always necessarily bad. Especially if the money is being generated to push effective growth. I think based on the companies that discoverIE has acquired and the financial strength behind them, I’m confident in its decision. I also believe that this makes its share placement more than understandable. Overall, I trust the direction discoverIE are going in, and I would look to add this share to my portfolio. 

The post This FTSE 250 share has jumped by almost 100% in the last year. Should I buy? appeared first on The Motley Fool UK.

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John Town has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The Morrisons (LSE: MRW) share price is rallying at the moment with a current rise of around 6% in the last month. In fact, the share price has been gaining momentum for the past year, with an increase of 51%.

The intense bidding war over Morrisons has taken another step with an accepted investment from buyers Clayton, Dubilier & Rice (CD&R). The confidence from investment groups has been driving the share price higher.

However am I too late to the table to buy Morrisons shares? Here, I examine whether the Morrisons share price has hit its peak or if it will continue to grow. 

Overview of the Morrisons bidding war

Two main investors are competing to take over the fourth-largest UK supermarket chain. They are CD&R and Softbank-owned Fortress Investment Group. CD&R’s first bid of £5.5bn was rejected back on 17 June, then Fortress returned with a higher bid of its own of £6.7bn. Morrisons delayed its decision on whether or not to accept this bid by calling for a shareholder vote. Now CD&R have returned with an even higher bid of £7bn, which has been accepted by Morrisons.

CD&R’s offer is valued at 285p per share. However with the Morrisons’ share price continuing to grow, it is likely that the story isn’t over yet. British takeover laws allow Fortress to submit a further bid. If Fortress were to up its bid, I am convinced that CD&R would be willing to do whatever it takes to win this bidding war. I’m basing this on the fact that CD&R’s bid is being led by former Tesco chief executive Sir Terry Leahy, who has the experience to identify promising opportunities in the industry. He is one of the main reasons behind Tesco’s rise to becoming the number one supermarket chain in the UK. 

Risks and concerns

One concern I have as a potential buyer of Morrisons shares is that I could be too late to buy. The share price is currently overvalued with a price-to-earnings ratio of 73.07. If no further bids come through the door then the share price might stagnate. There could even be a price correction, which would hurt an investment made at this current price.

Morrisons will also have to compete with strong competitors such as Tesco and Sainsbury’s. Major corporations like these could limit the potential that Morrisons has for growth. 

Is it too late to buy Morrisons shares? 

The bidding war could very well continue as the share price is seemingly still growing. If this is the case, I think the Morrisons share price could continue to gather momentum and speculation as the bids get higher and higher. 

However, this would mean making an investment based on the assumption that further bids will be made. Also, the current P/E is very high, especially when compared to its competitors such as Tesco. I will have to see this share price drop before I become interested in buying.

The post The Morrisons share price continues to rise. Can I still buy? appeared first on The Motley Fool UK.

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John Town has no position in any of the shares mentioned. The Motley Fool UK has recommended Morrisons and Tesco. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Investors have become bearish this week following the fintech company’s release of its financial forecast for the year. So, would it be best for me to follow suit and avoid this stock?

New short-term loan facility with ARC group

There was an early bounce-back in the Supply@ME Capital share price today and it jumped by almost 10%, although it’s down as of lunchtime Friday. The early rise followed news that the company has secured a short-term loan facility with investment bank ARC group. The deal will see an initial loan of £5m with a further investment of £2m in the next 60 days. This deal will replace Supply@ME Capital’s existing loan with Negma Group, which will receive 840m new shares with £2.1m paid back in cash. 

Supply@ME Capital is looking to build a strong relationship with ARC as it continues to generate capital from investors with the added possibility of a dual listing on NASDAQ with ARC. Indeed, I think this deal could be a promising prospect for SYME as international investors will be crucial for building momentum for this penny stock. 

SYME financial forecast 

The company expects to generate consolidated revenue of around £3.8m-£4.9m in the year ending December 2021. This figure is based on proposed fees charged by the group. SYME directors expect revenue to hit similar sums by the end of December 2022. They also said this forecast is not reflective of any contribution from Capital Bank funding, the deployment of the International Chamber of Commerce partnership, or the execution of Sharia-compliant inventory monetisation transactions.  

This report shows us that SYME is continuing to produce revenue and has good prospects for the future. However, for investors who were hoping for some more direction in terms of profits, they could be waiting a while. This lack of direction could explain the drop in the share price. 

Other risks to consider

As touched upon before, SYME will need investor support to get off the ground. However, it’s becoming apparent that this company is heavily reliant on third-party investors. This reliance could spark some volatility in the future. 

In addition, I think it’s important to note the competitive nature of the fintech industry. As an emerging company, SYME could struggle as other big companies such as PayPal continue to dominate the sector. 

Will I be buying? 

Supply@ME capital is proving to be popular with investment banks (such as Negma and ARC group, as their involvement shows), so as long as the company continues to receive monetary backing, I don’t think I will take this share off my watchlist. 

However, I’m less inclined to buy it at the moment until I see more direction in the way of generating profits and more consistency in the Supply@ME Capital share price. So for now , I’ll play a waiting game and see how this stock develops. 

The post What’s happening with the Supply@ME Capital share price? appeared first on The Motley Fool UK.

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John Town has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended PayPal Holdings. The Motley Fool UK has recommended the following options: long January 2022 $75 calls on PayPal Holdings. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The Melrose (LSE: MRO) share price has performed strongly this week and is currently up by 7% in the past five days. Investors have been anticipating the release of Melrose’s strong interim report, out on Thursday (2 September). 

The results show that Melrose is trading ahead of expectations and has significantly reduced net debt. However, there are possible headwinds coming its way. Here, I look ahead to see if the British manufacturing company’s momentum will hold steadfast.

Interim report gives the Melrose share price a boost

Melrose’s interim report has come as a surprise for me as it has really exceeded expectations.

Melrose has seen a huge reduction in its net debt from £3,399m to just £300m. Free cash flow generated reached £75m, and the earnings to share price rose to 2.2p. Revenue also rose from £3.3bn in 2020 to £3.5bn.

There is also more good news for shareholders who are looking to make passive income by investing in Melrose. The company announced that on 14 September it will be returning £729m, at 15p per share. 

These figures are certainly impressive considering the forecasted headwinds which could affect the aerospace and automotive sectors. However, in its report, Melrose stated that its automotive business is currently in a good position to benefit from the move to EV. A third of all its booking platforms are coming from wholly electric platforms. This comes to 50% of all bookings if you also include full hybrid platforms.

Melrose is also confident that it is well placed with its aircraft business being bolstered by high demand from defence spending and its re-shift in focus to faster narrow-body aircrafts. 

Headwinds

Although it seems that Melrose is defying headwinds with its strong interim report, I’m still concerned over future volatility in the aerospace marketplace. Melrose generates a large proportion of its revenues from aerospace manufacturing. Therefore the company could suffer as the sector is expected to drop by 25%-30% in the next year. 

Melrose could face further challenges to growth due to forecasted issues in supply chains and Covid-related disruptions. I believe the reason why the Melrose share price hasn’t jumped exponentially on the back of its interim report is because of these long-term risks. 

Should I buy? 

Melrose has shown excellent resilience in its interim report for the sixth months ended 30 June. The company has beaten expectations with its focus on key growth markets such as electronic vehicles. For me, a company that can recover well is always a good indicator that it will prove well for ROI. 

However, I’m unsure if Melrose will be able to keep this momentum going as the aerospace market becomes increasingly volatile. I see more difficult challenges ahead for this company. Because of this, I expect to see the Melrose share price suffer and so, I won’t be adding this share to my portfolio for the time being. 

The post The Melrose share price rises after stellar interim report. Is now the time to buy? appeared first on The Motley Fool UK.

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John Town has no position in any of the shares mentioned. The Motley Fool UK has recommended Melrose. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

If Lloyds does complete its recovery then its current price is surely an undervaluation. Does this low price provide an excellent buying opportunity for me? Here, I examine whether the share price could return to its former glory and what might possibly be holding it back.

Lloyds beats analysts’ expectations

I expect that Lloyds’ H1 FY21 report will be a delightful read for current holders of Lloyds shares. It demonstrates the bank’s resilience to continue on the path towards recovery with an optimistic outlook for the future. Net income rose to £7.6bn, up by 2% since H1 FY20, and average interest-earnings assets increased to £441bn. There was also a slight increase in statutory profit before tax to £3.9bn. 

The UK’s economic reopening has also helped Lloyds, along with other banks such as Barclays, to accelerate its recovery. As long as the UK doesn’t have another catastrophic outbreak of Covid cases in the winter, the future for Lloyds could be promising. 

Lloyds commits to property investment 

Lloyds lends out the most amount of mortgages in the UK and is now planning to buy 50,000 homes in the next decade. This move could see Lloyds become one of the biggest private landlords in the UK by 2030. Its new venture will operate under a new brand called Citra Living in partnership with FTSE 100 company Barratt Developments. Lloyds estimates that it will generate around £300m in pre-tax profit from a standalone of 10,000 houses. However, I’m concerned over the potential risks of this diversification. 

Lloyds has historically not performed well when moving outside of its major areas of business. For example, in 2019, Lloyds almost wiped out all of its third quarterly profits for mis-selling PPI. Lloyds exceeded other banks in the amount it had to pay out as compensation. The sum came to a total of £22bn. 

Now the bank is moving into the housing market, another sector that it doesn’t have experience in. I question whether now is the time to be taking risks for Lloyds. Sure, the UK economy is picking up but the winter months could cause a spike in Covid-19 cases. 

Will the Lloyds share price gain momentum? 

I think there are definitely reasons to be confident that the future looks bright for Lloyds. I only need to point to its H1 FY21 report to show that progress is being made. However, I’m not convinced by the timing of Lloyd’s property investment plans. 

In my opinion, the Lloyds share price should continue on this path of slow but steady growth. This is no problem for me as I’m more convinced by long-term growth shares over chaotic short-term stocks. I’d consider adding Lloyds to my portfolio with the expectation that it could look very profitable in a year or two. 

The post How long could it be until the Lloyds share price gains serious momentum? appeared first on The Motley Fool UK.

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John Town holds no position in the shares mentioned above. The Motley Fool UK has recommended Barclays and Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

This year has produced a lot of difficulty for Britain’s largest retailer. Moving into the second half of 2021, is it possible for Tesco to finish strongly or will its lacklustre performance only continue? Here I examine whether or not Tesco shares are a strong buy for me. 

The bullish case for the Tesco share price

It’s important to remember that Tesco is still the UK’s biggest retailer. So when a company of this size has an underperforming share price, there is always the possibility that I can make a decent profit from its undervaluation.

Tesco has the experience and expertise to stay around for generations to come. When I’m thinking of a major long-term investment, choosing a company that has become part and parcel of the marketplace is a sign of sustainability and security in investment for me.

I feel that getting the basics right for an investment is essential. It would be unwise of me to disregard Tesco’s fundamental success over the past decade. This is based on the fact that its revenue has grown from £54bn in 2016 to £57bn in 2020. 

Tesco has also come out strong in its FY21 report. Group sales were up by 7.1% to £53.4bn, retail cash flow rose by 29.8%, net debt dropped by 2.8%, and the dividend per share remained unchanged at 9.15p. This was also bolstered by its more recent Q1 report with like-for-like sales growing by 9.3%. Overall, the company is continuing to perform well in uncertain conditions. So why is the share price underperforming? 

Bearish factors for the Tesco share price

Although Tesco is still the largest supermarket chain in the country, competition is rising. Morrisons, as mentioned before, is seemingly upping its game with the completion of its momentous takeover by Clayton, Dubilier and Rice (CD&R). The Sainsbury and Marks and Spencer shares are also performing better than Tesco. The drop in the Tesco share price could simply be a result of its competitors’ share prices rising. 

Tesco is also fearful of another shortage in the supply chain heading into Christmas. However, a shortage of drivers, in part caused by Brexit, should affect the majority of supermarket chains and not just Tesco. 

Should I buy for September?

I’m uncertain on what the future holds for Tesco in the near future. I think it is very possible that the Tesco share price could face more problems moving into September. My reasoning is based on the shroud of mist regarding how Tesco has performed now restrictions have been lifted. On this basis I think the next financial report could be quite telling for what direction it will go in. 

So, for now I will hold off buying Tesco shares, although I do believe that in the long-term the UK’s biggest retailer would be a profitable investment for me. 

The post The Tesco share price is on the rise. Should I buy for September? appeared first on The Motley Fool UK.

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John Town owns no shares of the shares mentioned. The Motley Fool UK has recommended Morrisons and Tesco. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

With expectations of inflation on the doorstep, will this raw material based share be a resourceful addition to my portfolio? Here, I will consider the pros and cons of Anglo American and decide if now is the time for me to buy. 

What could inflation mean for the Anglo American share price?

During this time of post-lockdown recovery, a rise in interest rates from inflation could be devastating for the economy. However, commodity prices tend to rise during inflation and they can offer protection for investors against it. In times of inflation, we could see investors becoming bullish on commodity-centric industries and businesses like Anglo American. 

On top of that, when the economy and marketplace is volatile, big name and well-respected companies usually prove their worth. Anglo American, I believe is one of those companies that can stand its ground amid rough waters. 

Indeed, the company has produced positive reports. With a strong cash flow ratio of 22.6%, a high return on equity with a five-year average of 12.4%, and a five-year average operating margin of 18.8%, Anglo American in my opinion is a strong performer.  

In its half-year interim results, net debt has been reduced by $3.6bn due to strong cash flow. The company reported a attributable free cash flow of $5.4bn. 

While I do think inflation would make investment choices uncertain, I believe that Anglo American, due to its size and strength should be able to weather the storm. 

Is the drop in the price of platinum a concern?

Anglo American is the world’s largest provider of platinum, accounting for 40% of international output. In 2021, the price of platinum dropped. However, this hasn’t seemed to trouble Anglo American too much as investors are still seemingly supportive of the multinational mining company. In fact, the Anglo American share price has risen by almost 70% in the last 12 months. 

Anglo American’s other assets such as copper, nickel, diamonds, and iron have performed well in the last year. So, despite platinum underperforming, Anglo American’s diversity offsets this dip. 

There is also a final concern over the rising Covid-19 cases in China. This Asian market is a key area of consumption for Anglo American. If consumption were to drop in China, this could have adverse effects for the mining company. 

Will I be buying now? 

The drop in the price of platinum and the rising delta cases in China are areas of concern for me. Moving into September, we could see the Anglo American share price suffer because of these factors. 

However, I think Anglo American looks like a solid choice as a share to survive inflation costs. I am overall bullish on buying this share and I think it could gain momentum in the next few months, especially if inflation increases. Overall, I’d buy this share as a growing momentum investment and inflation guard.

The post The Anglo American share price climbs back up this week. Should I buy for September? appeared first on The Motley Fool UK.

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John Town has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Although my US shares are NASDAQ companies, they are also listed in the S&P 500, and because the S&P 500 is weighted based on market capitalisation, they have a heavy say on the index. It is generally thought of as the best index to value US stocks overall. If confidence is diminishing in the S&P 500, this could also spread to the index’s top companies such as Apple (NASDAQ: AAPL) and Tesla (NASDAQ: TSLA).

What is affecting the S&P 500?

As far I see it, there are two main factors causing uncertainty among US stock investors. The first is the rise in delta variant cases in the US. Infection rates are spreading by 20% week-over-week and Covid-related hospitalisations have risen 26.5% in America. As a result, this could negatively affect GDP.

The second factor follows the news that the Federal Reserve (Fed) revealed it could be reducing its monthly asset purchases this year. When this news was first revealed back in July, it caused a 2.3% decrease in the S&P 500. With the timing of Fed’s stimulus withdrawal coming closer, this might have other investors on red alert and could cause share prices to drop.

What I’m doing with my shares

Although the S&P 500 dropped to a low of 4,382 points this week and could follow this trajectory into next week, I’m not selling my positions any time soon. 

I own shares of Apple, Tesla, and Enphase Energy (NASDAQ: ENPH). None of them have had a great week in terms of their share price. 

Currently, the Apple share price has dropped by 1.5% in the last five days, reaching a low of $144.91. Apple is currently facing issues over an industry shortage of chips. The semiconductor industry was partly shut-down due to Covid-19 and is still playing catch-up. However, Apple’s recent quarterly results have been very impressive, with a 36% increase in revenue. 

The Enphase Energy share price sunk by almost 4% last week, to a price of around $166 as I’m writing. Enphase reported excellent financial results in its FY21 Q2 results with a 5% increase in revenue from Q1 to $316.1m. Enphase shares are expensive with a price-to-earnings ratio of 128.42.

The Tesla share price fell by just under 3% in the last five days. Tesla is currently facing a federal probe into its autopilot feature, with concerns over the safety of hands-free driving. This could explain the drop in price. However, the company’s financials are showing positive growth and strong revenue.

My outlook on the S&P 500 drop

For me, the important thing is to look at how a company is performing first, and then to analyse market trends as a secondary concern. It could be that these three shares will fall next week if the S&P 500 continues to drop, but this won’t dislodge my long-term dedication to these shares. Despite the drop, I’ve held these high-performing shares for a while and they are still green in my portfolio. I’ll be holding them for the foreseeable future.

The post The S&P 500 tumbled down this week. Here’s what I’m doing with my US shares appeared first on The Motley Fool UK.

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John Town owns shares of Apple, Enphase Energy and Tesla. The Motley Fool UK owns shares of and has recommended Apple. The Motley Fool UK has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The ups and downs of the Netflix share price

This year, the video streaming platform’s share price has been quite volatile. In mid-January the share price rose by 16%, only to drop by 10% a few days later. In mid-April, it happened again with the share price dropping by 7.4% in a single day. Now the price is starting to rise sharply again, so if it’s to repeat what happened previously this year, then that would mean it should correct itself again in the coming days. This has made some investors argue the case that the share price is providing no real evidence for the direction it will go in.

However, if I was a day trader then this would have me spooked. But Netflix, over the years, has seen good growth and as a long-term investor, I’m happy with its progress.

Competition grows

Netflix is still one of the biggest streaming services out there even though other streaming platforms are beginning to make serious moves on its market share. This is true of Walt Disney in particular with Disney+ growing every year. The company has reported a total of 116 million Disney+ subscribers worldwide. Amazon Prime is also growing fast and catching up to Netflix. In its FY20 report, the company stated that the number of Amazon Prime subscribers has now reached 200 million worldwide.

Netflix continues to grow 

While its competitors gather momentum, this hasn’t stopped Netflix subscribers from growing as well. In its June quarterly report, Netflix detailed an increase to 207.64 million paid subscribers as well as a 19% year-on-year jump in sales and a 138% rise in earnings per share at $2.97. 

Netflix is a company that has historically proved it can continue growing with a 1,420% return in the last decade. I also believe that there is still room for this company to grow further. Out of the $7.3bn of revenue generated, 55% of it came from outside the US and Canada. The streaming site is also making moves into Asian markets with the production of more than 200 original titles with 70 live action and Korean animé titles. 

Why I’m holding my Netflix shares

While the Netflix share price is unpredictable in terms of its sharp rises and falls, the streaming platform has continued to grow over the long term. I’m confident that the share price will continue to grow with potential expansions into new markets across the world. 

Although I plan to hold and build my position in the future, I’m not buying more shares right now. Based on the previous trends in the share price this year, I think I could see a drop moving into September. 

The post The Netflix share price rockets! Here’s what I’m doing with my shares appeared first on The Motley Fool UK.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. John Town owns shares of Netflix. The Motley Fool UK owns shares of and has recommended Amazon, Netflix, and Walt Disney. The Motley Fool UK has recommended the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.