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.”
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Trader disclosure: On May 4, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Pete Najarian is long AAPL; Pete Najarian is long C; Pete Najarian is long MS CALLS; Pete Najarian is long INTC; Pete Najarian is long INTC CALLS; Pete Najarian is long YHOO; Pete Najarian is long SBUX; Pete Najarian is long SBUX CALLS; Pete Najarian is long PEP; Anthony Scaramucci is long AAPL; Anthony Scaramucci is long BAC; Anthony Scaramucci is long GS; Anthony Scaramucci is long IBM; Anthony Scaramucci is long PEP: Steven Grasso is long ASTM; Steven Grasso is long AVAV; Steven Grasso is long BA; Steven Grasso is long D; Steven Grasso is long FRO; Steven Grasso is long LNG; Steven Grasso is long MHY; Steven Grasso is long NUAN; Steven Grasso is long MO; Steven Grasso is long PFE; Steven Grasso is long PRST; Steven Grasso is long S; Steven Grasso is long XLU; Steven Grasso is long ZAZA
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