Amazon, Netflix And Shutterstock: Mark Mahaney's New Top Picks

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RBC Capital Markets has had a material rerating in the tech sector since the beginning of this year. Analyst Mark Mahaney was on CNBC recently to discuss this rerating and share the outlook for his current top picks: Amazon.com, Inc. AMZN, Netflix, Inc. NFLX, and Shutterstock Inc SSTK.

Less Aggressive On Major Tech

"We began this year with many of these stocks at trough levels. Netflix, Amazon, Priceline, Google," Mahaney said. "They were all pretty close to, some of them were close to market multiples and that created interesting buying opportunities. We have had a rerating, so, overall as a group we are less aggressive than we were at the beginning of the year. That said, we still think there’s upside to those three names."

Related Link: Murray Christmas! Bill Murray Is Coming To Netflix

Amazon

On the kind of appreciation Amazon can see from here, Mahaney said, “Amazon we think there is a $500 pitch from where the stock is today. So, call it 15-20 percent upside from here and the big play on the stock, what needs still to be proven and what the market is still skeptical on, maybe rightfully so, is margins in the core retail business. We got positively surprised by AWS, but the skepticism is still there on the retail side. We think that skepticism can be overcome.”

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Shutterstock

Mahaney was asked his top pick from the small-cap tech sector. He replied, “Well Shutterstock is small-cap Internet land hass been very, very challenging, unless you got a company that got acquired. Very few of these companies have outperformed and its been much riskier in this space. Our top pick actually earlier in the year was Yelp, which hasn’t worked at all, but those are the top picks right now. Shutterstock is our top pick."

Netflix

“We put out a detailed report this morning on Netflix,” Mahaney said. “Near-term maybe only 10-15 percent upside, long-term we think there’s substantial earnings power here that’s under-appreciated.”

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Posted In: Analyst ColorCNBCAnalyst RatingsMediaMark MahaneyRBC Capital
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