By: James Giaquinto

January 28, 2011 


Whether it was protests in Egypt or a GDP report that was disappointing to some, the market tripped and fell down the stairs in Friday’s session. The Dow was off 166 points, or nearly 1.4%. Meanwhile, the NASDAQ and S&P declined 2.48% and 1.79%, respectively.

During this tough session, it seems that some people ran toward silver for protection. Silver Wheaton Corp. (SLWSnapshot Report) finished the session with a gain of 4.79%, which was pretty good given the circumstances. The performance easily made this silver streaming company the top-performing Zacks #1 Rank stock. In fact, no other company crossed the 4% mark on the list today. Volume crossed 15 million shares, compared to the daily average of a little more than 12 million.

SLW doesn’t actually mine the silver. Instead, it buys the metal from the miners at fixed prices. It has more than a dozen precious metal purchase agreements, and most of them are silver. Plus, the mines from where it buys the silver are in politically stable regions.

Silver Wheaton is a company that’s expected to double moving forward. It almost accomplished that feat in the third quarter, as earnings per share of 20 cents jumped by 82% from the previous year’s 11 cents. The result came in-line with our expectations.

The Zacks Consensus Estimate for 2010 has actually declined a penny in the past week and is now at 73 cents per share. At the same time though, that’s still a penny better, or 1.4%, than 2 months ago.

But as far as 2011 is concerned, analysts are expecting earnings growth of approximately 105%. The Zacks Consensus Estimate of $1.50 is up about 6.4% in 30 days and 23% in 2 months.

Silver Wheaton was 1 of 3 companies from the mining-silver industry on today’s Zacks #1 Rank List. The other 2 names were Compania de Minas Buenaventura S.A.A. (BVNSnapshot Report) and Coeur d’Alene Mines Corporation (CDESnapshot Report). (CDE was also among the Top Performers today with a gain of 2.79%.)

silver wheaton earnings trends.

Perhaps a movie will get your mind off of the market’s drop on Friday. If its fourth-quarter performance is any indication, more and more people are using Netflix, Inc. (NFLXSnapshot Report) for just that.

Despite the tough session, NFLX was able to gain 3.37%, and come in right behind SLW on the Zacks #1 Rank Top Performers List. Volume was almost 9 million shares, compared to the daily average of 4.85 million.

This week, the company announced a strong quarterly performance with earnings per share of 87 cents, which exceeding the Zacks Consensus Estimate by more than 22% while also topping last year’s 56 cents. Revenues jumped 34.1% year over year to $595.9 million.

Furthermore, its EPS guidance for the first quarter is between 90 cents and $1.13 per share, which was ahead of the Zacks Consensus Estimate.

The reason for this performance is simple: Netflix is adding customers…lots of customers. At the end of the fourth quarter, the number of subscribers increased 63.1% to 20 million.

We believe Netflix’s unique business model, strong subscriber base and continued focus on streaming services are key catalysts for growth moving forward. For more on this quarter, read: Strong 4Q for Netflix.

In the wake of the report, earnings estimates for 2011 and 2012 have both been on the move. The Zacks Consensus Estimate for this year is up 2.3% in the past 7 days to $3.97 per share. Earnings are expected to grow more than 41% in 2012 to $5.62 per share. This guidance is up 3.9% from one week ago.

As for the first quarter, the Zacks Consensus Estimate is now at an even $1 per share, up almost 15% in 7 days.

NFLX is part of the Internet Commerce industry. There is only 1 other company from this space on today’s Zacks #1 Rank List: IAC/InterActiveCorp (IACISnapshot Report).