Talk about catching the proverbial falling knife. Hedge fund manager Whitney Tilson tells us he’s buying Netflix on the decline.
Tilson, who is founder and managing partner of T2 and a CNBC Contributor, is famed for his keen market insights - he's one of the few investors who shorted housing ahead of the subprime crisis.
In an conversation off camera on Friday with Fast Money, Tilson told us his opinion of Netflix hasn’t changed, even amid the weakness.
He has been and we quote “buying steadily as its fallen” adding to his position in the mid-70’s. And he also told us, “Netflix is back to being a very interesting acquisition target.”
If you watch Fast Money regularly, you may remember that on April 24thTilson told us the decline was a gift.
"When something gets cheaper and the story stays the same we add to it," he said at the time. "We don’t look to the market for signals. We do our own analysis.
In late AprilNetflix reported earnings that beat expectations but also raised concerns about slowing second-quarter U.S. subscriptions.
"We didn’t see anything that troubled us in the earnings report," said Tilson, noting the second quarter is "always weak and if you look at the earnings, showing the seasonality. We’re not spooked."
“He probably thinks its very cheap,” muses top hedge fund manager Anthony Scaramucci on Fast Money's Halftime Report. Tilson is a value investor and he holds his position for a longer time period.
However Scaramucci cautions if you’re a trader with a short time horizon, “this is a momentum stock and when the momentum is pierced it falls sharply. In the near term I think it continues to get hammered.”