January 30, 2012, 3:04 PM

Netflix growth propels it among e-commerce stocks

The Internet Retailer Online Retail Index gained 3.0% last week.

Kevin Woodward

Senior Editor

Lead Photo

E-commerce stocks found favor with investors last week, led by a rebounding Netflix Inc., as the e-commerce sector outperformed the broader market.

Investor reaction was strong to Netflix’s 2011 results released last week. Netflix, No. 13 in the Internet Retailer Top 500 Guide, reported net income of $231.6 million, a 44.0% increase from net income of $160.9 million in 2010. Streaming membership in the fourth quarter grew faster than Netflix expected, reaching 21.67 million, an increase of about 220,000 members, the company says. That followed a rocky third quarter in which a price increase led to Netflix losing 3.3% of its subscribers.

Investors reacted positively to the news, says Colin Sebastian, an analyst who follows e-commerce stocks for securities firm Robert W. Baird & Co. “Netflix showed an unexpected increase in subscribers to their streaming video service, and also better than forecasted earnings,” Sebastian says.

Overall, there were more winners than losers in the Online Retail Index, which tracks 25 publicly traded e-retailers and e-commerce technology providers. The index advanced 3.0% last week, while the Down Jones Industrial Average fell by 0.47% and the Standard & Poor’s 500 Index increased 0.07%.

Here are the best-performing stocks last week in the Online Retail Index and the percentage increase in stock price for each:

• Netflix, 23.5%

• Vistaprint, 15.9%

• 1800Flowers.com, 11.8%

• Digital River, 9.8%

• Shutterfly, 8.7%

Here are the Online Retail Index stocks that performed least well last week and the percentage loss in stock price for the week:

• eGain, -13.3%

• NutriSystem, -13.1 %

• Bidz.com, -10.9%

• Coastal Contacts, -4.8%

• Groupon, -4.0%

The 25 companies in the Internet Retailer Online Retail Index are: 1-800-Flowers.com Inc., Akamai Technologies, Amazon.com Inc., American Greetings Corp., Bidz.com Inc., Blue Nile Inc., Bluefly Inc., Coastal Contacts Inc., Digital River Inc., eBay Inc., eGain Communications Corp., Groupon Inc., Keynote Systems Inc., LivePerson Inc., Netflix Inc., NutriSystem Inc., Overstock.com Inc., PetMed Express Inc., Shutterfly Inc., Systemax Inc., U.S. Auto Parts Network, United Online Inc. (owner of FTD.com), ValueClick Inc., Vistaprint Ltd and Vitacost.com Inc.


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