Weekend Reading

9 February 2019 | by Ensemble Capital

A summary of this week’s best articles. Follow us on Twitter (@INTRINSICINV) for similar ongoing posts and shares.

Fox executive calls rival netflix’s viewership figures misleading (Joe Flint, @JBFlint, The Wall Street Journal)

Netflix has experienced explosive growth over the past decade and there are now more Netflix subscribers in the US than traditional cable subscribers.  With that kind of growth, there’s bound to be some skeptics and 20th Century Fox executive John Landgraf is one of them.  Landgraf purports that Netflix has been releasing misleading viewership numbers to inflate the popularity of their programming.  Netflix has proven to be able to sustain growth with consistent 20%+ price increases in their monthly plans without significantly impacting their subscriber numbers.

Showcasing the power of startup women’s health brands, P&G buys Thhis is L (Jonathan Shieber, @jshieber, TechCrunch)

Few legacy consumer brands can have dominant share in their marketplace, especially for things like retail products for women’s healthcare.  As competition increases, legacy brands are deciding the solution is to acquire younger, smaller and more innovative companies.  That’s what happened with P&G and their $100M acquisition of This is L, a startup retailer of period products and prophylactics.  Jonathan Shieber talks about the financial outcome and the deal’s implications for mission-driven companies.

UK new car sales fall as electric and hybrid cars surge in popularity (Alyana Vera, City A.M.)

Sales for diesel engine cars dropped in the UK last year while the demand for electric and hybrid plug in cars surged.  Electric cars continue to gain popularity despite the UK government slashing subsidies for the electric cars.  The outcome of this increased demand could be a win for both the environment as well as the manufacturers.  Ensemble President and Chief Investment Officer, Sean Stannard-Stockton gave a presentation about auto sensor producing giant Sensata in his Sensata Technologies Presentation which includes a discussion of the company’s sensors for electric vehicles.

JPMorgan says 2020 ‘might not be year to think about recession’ (Joanna Ossinger, @ossingerj, Bloomberg News)

The fourth quarter of 2018 had many investors worried that the US economy was on the brink of a recession but following the recovery in the market so far this year, some might say those thoughts are long gone.  JP Morgan analysts noted the recent change in tone from the Federal Reserve and stated “That means investors shouldn’t be driven by fears of recession now.”  In this article, Ossiger discusses cyclical indicators and global economic growth and how these are related to recession risk.  Ensemble President and Chief Investment Officer, Sean Stannard-Stockton wrote about his thoughts on a recession in a recent article We Might Not Have A Recession…For A Long Time

 

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