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1/ I believe one of the most undervalued assets on Wall Street is Alphabet's YouTube. Let's discuss.

Long $GOOGL $GOOG
2/In 2019, YouTube CEO Susan Wojcicki announced the video content giant boasted more than 2B monthly users and that 250M hours were being consumed on the platform every single day.

variety.com/2019/digital/n…
3/ In 2020 Q1 conference call, $GOOG CEO Sundar Pichai stated that YouTube watch time had "significantly increased."

Pichai specifically called out livestreams, noting that singer Andrea Bocelli scored 39M views when he sang live on Easter morning.
4/ Teenagers spend 31% of their daily video consumption on the platform.

Source: businesswire.com/news/home/2020…
5/ In Q1, YouTube ad revenue grew 34% YOY to $4.04B.Significant YouTube revenue growth persisted until late in Q1 w/ different performance trajectories for higher-level brand ads and ads w/direct response components (think app installs and gaming).
6/ Direct response continued to have substantial YOY growth throughout the entire quarter. Brand advertising growth accelerated in the first 2 months of quarter, but then experienced significant headwinds in late March.
7/ But while ad revenue will rise and fall depending on macroeconomic factors, it's clear the viewers are there to stay, meaning the ad revenue will always return. No other platform gives you so much educational, informative, and entertaining content.

Long YouTube. Long $GOOG/L
8/ More

h/t: @LukaGallinari

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Matthew Cochrane
@Matt_Cochrane7
1/ Phil Fisher's 15 points to look for in potential investments, from the classic investment book, COMMON STOCKS AND UNCOMMON PROFITS.

Point #7: Does the company have outstanding labor and personnel relations?
2/ Fisher quickly points out that the cost of bad labor relations extends far past than the direct cost of strikes.

Employee churn is a very real cost caused by bad relations and good relations can lead to far higher employee productivity.
3/ There's no metric to look up to evaluate labor relations, but we can look at how disputes are resolved, esp complaints made to HR.

e.g. This story was a red flag that something was amiss at $UBER pre-IPO. If co doesn't clean house after this, beware.

engadget.com/2017-02-20-ube…
Read 7 tweets
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Matthew Cochrane
@Matt_Cochrane7
1/ Akre Capital Management says the essence of their investment approach captured by 3-legged stool:

1) Extraordinary business
2) Talented management
3) Great reinvestment opportunities and history

If you could add a fourth leg, what would it be?
2/ Akre's track record is enviable. The firm's mutual fund has crushed the S&P 500 since inception.
3/ Akre's current top holdings as of 3/31/20: $AMT $MA $MCO $V $SBAC $ORLY $ROP $MKL $KMX $ADBE

This quarter, Akre started new positions in $ADBE $LYV and $MAR

Added to $CSGP $ANSS $OLLI

Trimmed $ORLY $DLTR $MKL $MCO $BRK.B
Read 8 tweets
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Matthew Cochrane
@Matt_Cochrane7
1/ Phil Fisher's 15 points to look for in potential investments, from the classic investment book, COMMON STOCKS AND UNCOMMON PROFITS.

Point #5: Does the company have a worthwhile profit margin?
2/ As investors, we pay attention to a lot of things -- macro trends, total addressable market, user engagement/growth, etc. -- but we can't let all of these important things distract us from the most important thing: profits! A company must have a path to profit growth!
3/ High profit margins and long-term profit growth are found in the best companies, so be careful about wasting your time/money w/mediocre companies. The only exception to this rule is if there are companies undergoing a transformation.
Read 5 tweets

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