Market Insider

The analyst who sniffed out Buffett and Icahn moves believes someone big is buying Netflix

Key Points
  • The  Gordon Haskett analyst who discovered Carl Icahn was investing in HP now says someone looks to be buying a stake in Netflix.
  • According to analyst Don Bilson, Nomura has been active in Netflix and that could be a precursor to the emergence of an activist investor.
  • Bilson says he has no knowledge of who the buyer would be, but speculated on Icahn and Pershing Square Capital founder Bill Ackman.
  • Bilson says the activist investor community has high regard for Netflix CEO Reed Hastings and the holding is probably simply an investment in a depressed stock.
Don Bilson: A big investor may be planning to buy into Netflix
Don Bilson: A big investor may be planning to buy into Netflix

The analyst who uncovered Carl Icahn's recent purchase of HP stock and Warren Buffett's backing of Occidental Petroleum now says a big investor may be sniffing around Netflix.

Don Bilson, head of event-driven research at Gordon Haskett, said it looks like Nomura Holdings picked up 1.89 million Netflix shares in the third quarter and may have acquired the stock for an activist. Bilson, after all, figured out that Nomura helped get Icahn into HP via an options trade.

According to FactSet, Nomura holds an equivalent of 0.44% of Netflix shares, and Netflix is about 4.3% of its total portfolio. The firm's third-quarter 13-F filings shows several positions and options.

Watch Warren Buffett's full interview with CNBC's Becky Quick
Watch Warren Buffett's full interview with CNBC's Becky Quick

While Bilson claims no special knowledge of who might be buying, he pointed to two possibilities. First, he suspects Bill Ackman of Pershing Square Capital, who had recently said he was building a new position and was looking to "top it off."

"It's the pattern. This fits the model for building top-notch stock holdings that have undergone a price dislocation. It's not necessarily an activist play. It's buying the best. What he has done a lot of recently is to not take swings at things that are real hairy or dangerous," said Bilson. Ackman has made similar investments in Nike, Starbucks and Berkshire Hathaway.

"We will not comment on speculation of that kind," said a Pershing spokesman.

Icahn could also be a possibility. "He made a bazillion dollars in this thing. He's been there," said Bilson. Going back years, Icahn previously reported buying Netflix and then selling the stock at a profit. Icahn was not immediately available to comment.

Even though it appears an activist may be buying, Netflix is not an activist target, said Bilson.

"The comments from the activist community is there's nothing to do with Netflix. The respect [Netflix CEO] Reed Hastings has within that community is sky high. Nobody's going in there to push Reed Hastings around and tell him what to do. This is not an activist position, but it's a smart investment," said Bilson. "It's a great company with a good management."

Netflix did not immediately respond to an email seeking comment.

Netflix was just over $293 per share Friday, well off its 52-week high of $385.99.

Icahn disclosed this week he has a stake of about 4% in HP, and he reportedly has pushed Xerox to bid for the printer company. Icahn holds nearly 11% of Xerox. Bilson said he had noticed the HP investment in the second quarter filing.

"We were confident it was an activist and any simple exercise of connecting the dots would have put that together," he said. "We definitely mentioned that on Oct. 2 and then after the Journal had the story that Xerox had made this approach, we teed it up again and we said we thought he was on both sides of the trade."'

Likewise, he figured out that Occidental was getting help from Buffett, after he learned the Occidental Petroleum corporate jet had landed in the billionaire's hometown, Omaha, Nebraska. Buffett bought a preferred stake in Occidental, helping it fund its bid for Anadarko.

—With reporting by Michael Bloom