Weekend Reading

23 March 2019 | by Ensemble Capital

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

Beware of the Dividend Cult (Vitaliy Katsenelson, @vitaliyk, Advisor Perspectives)

Like many investors we love a good paying dividend stock. But what we really look for is companies with high and sustainable cash flow production, run by management teams that allocate that cash in the most productive way possible. In this piece Vitaliy Katsenelson pushes back on some investors’ myopic focus on dividends in an argument we strongly support.  Ensemble President and CIO, Sean Stannard-Stockton wrote about his thoughts on stock valuations in this article: The Risk of Low Growth Stocks.

New York Times CEO Warns Publishers Ahead of Apple News Launch (Reuters, The New York Times)

Apple is expected to launch an ambitious new entertainment and paid news digital service next Monday as they push back against streaming video leader Netflix.  This has Mark Thompson, CEO of the New York Times feeling uneasy as he has warned that relying on a third party for distribution can have dangerous consequences for publishers as they may lose control over their own content.

Airlines Review Plans as Boeing Phases First Cancellation of 737 MAX Order (Robert Wall, @R_Wall, The Wall Street Journal)

Boeing is one of two major commercial aircraft producers and with the recent problems of the 737 MAX, they’re having to adapt quickly as passengers are losing confidence in this aircraft.  Following the two accidents, regulators idled the global fleet of more than 370 MAX planes and Vietnam’s VetJet are considering halting all future purchases.  Although the aircraft represents only a fraction of Boeing’s global fleet, the company is having to adapt fast to avoid negative customer sentiment.


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