All posts by James Cannon

About James Cannon

James Cannon is an experienced hedge fund analyst. He has served on the advisory boards for various different Fortune 500 companies as well as serving as an adjunct professor of finance. James Cannon has written for a variety of Financial Magazines both on and off line. Contact James at james[at]businessdistrict.com

Some Out-of-the-Box Reasons to Bet on Netflix

News,

Netflix is a great company that seems destined to continue as such in the foreseeable future. They are adding customers consistently; they have lots of new, quality content; and lots of people seem to make time in their time to watch.

Netflix added 8.76 million new subscribers across the globe in the fourth quarter of 2019, exceeding all of the most optimistic predictions. Also, binge-watching was reported up during Q4, despite the belief that viewers were going to turn to the competition, Apple and Disney who have entered the streaming marketplace. People are still getting their binging needs met by Netflix. What’s to account for the loyalty of Netflix viewers? The great content, of course. Netflix’s third season of the acclaimed show “The Crown” experienced a 40% growth in viewership over the previous year’s second season. Another Netflix show, “The Witcher,” took away first place as the world’s most-watched TV show from “Mandalorian.”

But there are other than those easy-to-Grok reasons for investors to add Netflix to their portfolios, and you will probably never guess what those reasons are: the Wuhan coronavirus; global warming; and of course, Tesla. (Only because Tesla seems to be the answer to a lot of questions right now.)

Did I hear you say huh?

This is why one analyst thinks the Wuhan coronavirus will feed the binging behavior of viewers around the globe.

“Netflix inc. could find itself the unusual benefactor to an outbreak of a SARS-like virus in China if moviegoers in the region opt to break the tradition of going to theatres during the lunar new year and binge-watch Netflix instead.”

And what about climate change? As the weather gets hotter and rainier, people will most likely spend more time indoors. And when they are indoors, well, the TV is always calling. Binge!

You’ve probably already figured out how autonomous cars will help Netflix stock climb. You’ve guessed it! While your car is driving itself, you can relax and enjoy another episode of “You,” “Stranger Things,” or “Orange Is the New Black.” All I can say is: “Netflix for president!”

Delta Announces Best Year Ever

Transportation Industry
Photo courtesy of TJDarmstadt

Things really took off for Delta Airlines in 2019. The fourth quarter of last year was one of record earnings, surpassing expectations. They also flew by their competitors to become the world’s biggest airline.


One component of Delta’s success was the unfortunate story of the grounded Boeing 737 Max fleets, which only affected Delta’s competitors, American, United and Southwest, never having purchased those suspicious airplanes. As a result, Delta could grab 7.5% revenue growth, partially due to better efficiency. One important airline metric, revenue per available seat mile (RASM) was up by 2.4%.


When Delta is high, so are its employees. The company is going to pay its 90,000 workers their highest ever profit-sharing bonus: $1.6 billion. That comes out to about 16.66% of each employee’s yearly salary, or about 2 months’ worth of pay.


“2019 was the best year in our history,” CEO Ed Bastian said. “These results simply would not be possible without the incredible work of our Delta team.”


The company was smart as well as lucky in 2019. Avoiding the Boing 737 Max could have been a combination of luck and smarts; while avoiding angry labor disputes was certainly smart. Having good weather at their hubs, of course, is simple luck.

If It’s Tuesday It’s B2B Day

Emerging Markets, , ,

Last Tuesday was the first “B2B Tuesday,” an initiative sponsored by Alibaba.com to raise awareness about the contributions small and medium businesses make to the US economy and to help them get more market share in the global ecommerce community.
Alibaba.com is the B2B division of Alibaba Group (NYSE: BABA).


B2B Tuesday will from now on be a regular event celebrated not only by Alibaba.com, but by other organizations that share similar goals. The 2B2 community will promote the successes of US 2B2 SMBs, share knowledge, resources, and other information that can help them grow. They hope to help SMBs to access the over $23.9 trillion global B2B eCommerce pie, an amount that is larger by a factor of six than the B2C eCommerce market. The event every Tuesday will feature B2B stories of success, face-to-face events, highlights of new offerings, educational content, and more.


An independent research company recently conducted a “US SMB Confidence Survey at the behest of Alibaba.com. They asked 5,000 US SMBs who engage in B2B business to relate to the following issues:


• The survey found that 62% of B2B businesses are feeling optimistic about the economy.
• A bit less than half (46%) said they expect their B2B business to improve.
• Substantially more than half (57%) hired new employees to support their online B2B buying and selling.


Other issues explored in the survey included globalization and digitalization.


“Strong SMB confidence among American business owners and entrepreneurs, plus the growth from digitizing of their business and doing business globally means the future is bright for U.S. SMBs,” said John Caplan, head of North America B2B at Alibaba Group. “Less than one third of businesses we surveyed have been doing business online for more than five years. That means there is an enormous opportunity for U.S. SMBs to digitize and grow their businesses globally with ease. And B2B Tuesday is one more example of how Alibaba.com is here to help.”

Looking into the Future with 2020 Vision

News

Not only does the year 2020 welcome in a new year, but a new decade as well. And this decade is expected to be a great one, based on the current economic trends we are watching.


Labor force


At the end of 2019 the economy saw unemployment reaching record lows, with an uptick in wages, especially for non-supervisory jobs. One question looming is whether this year will be the one with upward moving wages pushing inflation up as well?


Consumer spending


Even if consumer spending losses some of its muscle, the labor market just on its own will sustain spending on goods and services, and in housing, too. Keep your eyes on real estate, as it is ready to have a great coming year due to lower interest rates, and sluggish last two years. Hopeful homeowners and builders have been waiting for the starting bell to ring as numbers of building permits are rising.


Manufacturing madness


It seems that the miasma of the last two quarters of 2019 in factory production is about to lift with the dawn of a new decade. However, it could go slowly, as recovery from the China trade war might not happen overnight, and companies could stay cautious as they wait to see what kind of trade agreement with the great Asian giant will be reached.
Not to mention what effect a strong dollar will have on exports. Watch and learn.

Business Degree is a Springboard to Many Great Jobs

Education

Having a business degree, according to people who have one, is a fantastic way to prepare for a rewarding profession in a variety of fields. They say that knowing how to start and run a successful business is helpful for many rewarding careers.


“A business degree, whether it is at the undergraduate or Ph.D. level, allows you to understand how to make money off of anything,” said one second-year MBA student. “Business degree-holders learn the basics of how to determine what a good business opportunity looks like and then how to maximize the amount of money made from this opportunity.”


The non-profit sector is another place business degree-holders can find gainful employment. It makes good business sense to hire someone who can decide the smartest way to use money efficiently, even more so when the money is acquired by people wishing to have their money used for a cause they believe in, and not wasted on unnecessary office expenses and the like.


Recipients of business degrees also learn problem-solving skills, useful in a broad range of industries.


Although some jobs require additional degrees, like engineering or medicine, having a business degree as well can help when a doctor or engineer decides to set up his own business.


There is no question that a business degree can provide a person with many useful as well as marketable skills: insight into people, the process and the product of a company, and a sense of what it takes to create a thriving organization.