We're just three weeks into the new year, but we're already seeing some stocks starting 2021 on the right foot. This week, it's Netflix (NASDAQ:NFLX), opening higher on Wednesday after posting blowout quarterly results.
The leading premium streaming service isn't alone. Earlier this month, we saw Tanger Factory Outlet Centers (NYSE:SKT) and fuboTV (NYSE:FUBO) also break out of slumps by painting a brighter portrait of how 2021 will play out. Let's go over these three stocks that are kicking off the new year with welcome news.
We're spending gobs of time at home. Streaming video has been an obvious beneficiary, and Netflix is the top dog in this booming niche. Netflix saw its popularity surge in the first half of 2020, adding 25.9 million to its growing audience of paid subscribers worldwide. In six months, it almost had as many net additions as the 28 million it tacked on for all of 2019.
Subscriber growth slowed in the second half of the year, but that was widely expected with Netflix pulling so many of its full-year members into the initial "shelter-in-place" phase of the pandemic. It still ended up exceeding its forecast of 6 million net additions in the fourth quarter. Growing by 8.5 million net additions in the final three months of the year pushes the company's global audience past 200 million.
The news gets even better. After five quarters of decelerating year-over-year revenue growth, it sees the top line accelerating. Its profit target is also well ahead of where analysts are perched. With Netflix now confident that it can get through its day-to-day operations without needing external financing, the market leader will continue to crank out more content than anyone on the planet with money to spare for stock buybacks for the first time in a decade.
Tanger Factory Outlet Centers
The operator of 38 factory-outlet shopping centers had a challenging 2020 with its temporarily shuttered storefronts and some of its tenants going under. It also suspended its payouts in the springtime of last year. As a real estate investment trust (REIT), Tanger must distribute at least 90% of its taxable income to investors. It promised to return to distributions in 2021 if it was on the path to profitability -- and it didn't take long.
Tanger Factory Outlet Centers declared a resumption of it quarterly payouts last week. The discount-mall REIT's new payout amounts to a yield of 5.3% as of Tuesday's close, but it's also half of what it was before pausing its distributions last year. Shopper traffic is already at 90% of where it was a year ago, and its occupancy rate should bottom out here at nearly 92%. As it refreshes its portfolio with better brands as tenants, Tanger Factory Outlet Centers may be in even better shape than before the pandemic.
Streaming services including Netflix are helping entertain folks, but where do cord-cutters turn to for live sports, broadcast news, and major networks? Live-TV streaming services are filling the void as costly but flexible platforms, and fuboTV has tried to set itself apart from YouTube TV and Sling TV by emphasizing live sports. It offers roughly 40 sports channels among its more than 100 live networks.
FuboTV has attracted a pair of naysayers, and one of them -- Kerrisdale Capital, which is short the stock with a $10 price target -- pointed to third-party data showing that sign-up momentum slowed in the final two months of 2020. FuboTV boosted its subscriber guidance twice as the quarter played out; was it setting investors up for a fall?
Kerrisdale Capital may want to get its money back from the third-party data source it failed to attribute. FuboTV recently announced that it closed out 2020 with 545,000 subscribers, well ahead of the 500,000 to 510,000 it was expecting in November and what was as low as a 410,000 year-end target when the fourth quarter began. Revenue rose between 77% and 84% for the final quarter of 2020, accelerating from the still-impressive 71% increase it posted in the third quarter.
There's still naturally a long way to go before this new year comes to a close. Netflix, Tanger Factory Outlet Centers, and fuboTV are doing a good job of starting 2021 on a winning note.