Stocks

Interesting, and often contrarian, Snippets on individual companies and the stock market.

Stocks

Diagnostics

  • Covid is having one huge positive impact if governments seize it.
  • In its results Roche said of diagnostics equipment – “we are installing in one year what we have installed the prior five years. So we are more than doubling our installed base out there of the systems.“
  • This huge increase in capacity, they go on to say, could be used to detect HPV (saving 300,000 women’s lives who die of cervical cancer every year), HepC (helping 80 million people who live with this disease), and Tuberculosis (“one-fifth of population has infection of the bacteria of tuberculosis worldwide”).
  • “We need to start to recognize what health care systems can do by intervening much earlier. And I have to say, there is such an opportunity and governments need to get going on this. I’m sorry to get a bit emotional on this, but I have been fighting for 10 years with governments to include HPV screening and all the clinical data is out there, and they need to get going, and not just you know let it go, like they have in the past.“
Stocks

Inflationary Pressures

  • Some quotes on the topic courtesy of The Transcript.
  • “…we do expect some significant cost inflation in the year…The top two inflation drivers for this year are expected to be pulp and polymer based materials. Together those two input costs represent more than half of the inflation outlook.” – Kimberly-Clark (KMB) CFO Maria Henry 
  • “We expect prices to be positive based on all the inflation that we are seeing.” – 3M (MMM) CFO Monish Patolawala 
  • “…the transportation market is very tight. Spot market rates have increased by more than 30%…And just a bit more color on commodities…we see headwinds on our major commodities right now. But not only on our major commodities, but some of the smaller purchases of raw and packing materials that we use across the rest of our business.” – Church & Dwight (CHD) EVP-Global Operations Rick Spann 
  • “…we are starting to see a little bit of inflationary pressure, particularly around freight and a little bit in the supply chain as well.” – Danaher (DHR) CFO Matt McGrew 
Stocks

Chip Wars

  • There is a lot being written about China’s push for self-reliance.
  • One of the biggest parts of this story over the next decade is likely to be the battle for semiconductor technology of all kind.
  • The electronic design automation (EDA) industry is controlled by three firms and are all US. China is now making first moves into this industry., crucial for semiconductors.
  • Europe is also getting involved and has just signed a €145bn declaration to develop a next generation processor and 2nm technology.
Stocks

Content Business

  • A great piece of analysis applying Helmer’s 7 powers to the content business in order to establish if content has ability to maintain profitability and resist competition.
  • Scale is one such power – this chart shows there is a slight positive linear correlation between size of budget and eventual box office returns.
  • Network effects are also interesting – given the social dynamics of shared experience and discussing content. Franchises really shine here.
Stocks

e-commerce Marketplaces

  • A brilliant long read on the state of e-commerce marketplaces in 2020.
  • Amazon marketplace, which “added eBay’s worth of sales to its GMV this year“, is a key topic.
  • The nature of sellers there has evolved, including the new trend of capital raised to roll-up (i.e. acquire) sellers.
  • The review also covers other winners like Walmart and Etsy.
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