‘Shark tank’ investor Mark Cuban knows a thing or two about making money. So when he speaks, investors listen. And now he has revealed some of his favorite stock bets. There aren’t many of them, but here they are:
“I’m down to maybe four dividend-owning stocks, two shorts, and Amazon and Netflix. I’ve got a whole lot of cash on the sidelines,” Cuban told CNBC.” “[I’m] ready, willing and able if something happens” to invest.
“If I get a feeling that [economic] growth will continue at 4-plus percent and the debt will then come down, then I’ll get back into the market,” said Cuban.
With this in mind, we turned to Wall Street’s finest to see what market experts make of these two top stock picks. TipRanks tracks and ranks over 4,800 analysts making it easy to cherrypick advice from top analysts.
So should you follow Cuban’s lead? Let’s take a closer look now:
Amazon (NASDAQ:AMZN)
Clearly Mark Cuban and the Street are of one mind when it comes to Amazon. This is still one of the Street’s favorite stocks. In the last three months, 35 analysts have published AMZN Buy ratings. This is versus just 2 Hold ratings. Plus- even though the stock now trades at over $1,900- analysts still see further upside potential of over 10%.
But its Amazon’s future growth prospects that are exciting analysts right now. Piper Jaffray’s Michael Olson (Profile & Recommendations) has one of the best rankings on TipRanks. And he has just released a very bullish report on Amazon’s advertising potential.
According to Olson, advertising could be the next major growth driver for Amazon. “By 2020, we expect Amazon ad revenue of $16 billion and by 2021, beyond the scope of our current model, we believe it is highly likely that profits contributed from advertising will exceed those from ASW,” Olson wrote in a note to clients.
“Said differently, investors should be focused on Amazon advertising now; this is a major driver to results and valuation today and continuing in coming quarters and years.” In 2018 alone, Olson is now predicting ad revenue of about $8 billion in 2018, which could return over $3 billion in operating profit.
Meanwhile, D.A. Davidson’s Tom Forte (Profile & Recommendations) is focusing on an entirely different potential money-maker. “Based on our estimates, Amazon is currently pursuing 8 of 10 market opportunities that exceed $1T, globally. We see an opportunity for it to exploit the remaining two – gas (stations) and travel,” Forte told clients.
The “company has a history of solving complex logistical problems. Financially, it seeks opportunities that can generate significant free cash flow.” So it makes sense that Amazon will now turn its attention to these untapped markets. Forte even suggests that Amazon could “sell consumers not only the airline tickets and hotel accommodations but also everything they need for their trip.”
Netflix (NASDAQ:NFLX)
Streaming giant Netflix is a more controversial stock option. Shares are trading down 20% on a 1-month basis, but still up a whopping 67% year-to-date. If you held only a handful of stocks would you take a chance on Netflix?
Top 100 Aegis Capital Victor Anthony (Profile & Recommendations) is hedging his bets. Anthony notes that Netflix’s five quarter streak of subscriber outperformances has now come to an end. For Q2, Domestic and International subscribers came in below Aegis Capital estimates, below consensus, and below the company’s own guidance.
Post results, Anthony wrote “While this quarter’s miss/guide in no way alters the fundamental outlook for Netflix, as it remains one of the best secular growth stories on the Internet, it does put on pause the extremely bullish sentiment that has led to a doubling of the share price this year.”
He continues: “Our concerns about cash burn remains, and post the 2Q18 results, we are more cautious about the pace of the subscriber growth curve over the next two years.” As a result, Anthony has a Hold 
rating on the stock with a $305 price target. This suggests prices could pull back by as much as 7%.
On the flip side, Monness’ Brian White (Profile & Recommendations) is staying firmly in the bull camp. He has a $430 price target on the stock, indicating that shares can spike a further 31%. Although White has reduced his target from $460 previously, he tells investors not to be concerned.
On the contrary he sees this as a positive shift: “Given the meaningful upside over the past couple of quarters, Netflix may have gotten ahead of itself in terms of global streaming net addition expectations; however, we view this reset as healthy and not the end of this strong, global, secular growth story. We are reducing our estimates and cutting our price target to $430 from $460.”
Indeed, as far as Netflix is concerned, cautious optimism seems to be the way forward as this screenshot suggests:
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