Netflix to Ramp Up Original Content as Disney Buys Fox for $52.4 Billion

CCO of Netflix Ted Sarandos

Ted Sarandos, (Netflix’s Chief Content Officer), had his annual chat at the UBS Global Media and Communications Conference last Tuesday, touching on a number of items, including: the recent success of the Netflix original show “Stranger Things,” Netflix’s continued international expansion, and the impact of licensed content partnerships. We used Sentieo to analyze the transcript and chart Netflix’s viewership trends.

We ran a sentiment analysis of Sarandos’ transcripts at this conference over the past few years (see below). The analysis indicates continued optimism this year, at a similar level to that of last year.

Transcript Sentiment for NFLX

We then cross-checked management sentiment with Sentieo Mosaic data to see how Q4 is progressing for Netflix. In the chart below, see that YoY data for Netflix’s Google Trends (green), Alexa Website Visits (red), and Twitter Mentions (light blue) have led to major inflections in Global Subscriber Growth (purple). Analysts expect Q4 subscription growth of 22.6%, a significant deceleration from Q3’s 25.9% level. The data here looks bullish: notice that Google, Alexa, and Twitter data are suggesting a continuation of current growth rates while consensus expects a big deceleration for subscriber growth.

Netflix subscribers

So what’s driving this? For starters, “Mindhunter” and “Stranger Things 2” were both released in early Q4. The chart below shows that Season 2 of “Stranger Things” was a breakaway success, with its Twitter Mentions handily eclipsing those of Season 1 as well as all historical releases of other popular shows “House of Cards,” “Orange is the New Black,” and “Narcos.”

netflix stranger things

Sarandos confirmed this success in his comments at the UBS conference, where he highlighted the show’s popularity as “one of the biggest entertainment phenomena on the planet.”

Netflix CCO

Notice Sarnados’ emphasis on the global nature of Netflix’s original content hits. When overlaying the “Stranger Things” Twitter data (orange) against Netflix Google Trends data in the United States (blue) and Google Trends international (green,) you see that the impact to the US was significantly larger and that the needle barely moved for international.

netflix viewers

This goes to show that localized, original language content is the key to continued international penetration. Sarandos mentioned Spanish-speaking countries nine times during the call and was particularly excited about the show “Ingobernable.”

netflix COO

The data corroborates the “Ingobernale” Season 1 release, which yielded a significant jump in Google Trends data in Mexico, Brazil, Argentina and others. Previous releases of “Narcos” have had a similar effect.

netflix content

Most of Sarandos’ commentary was around original content, and he even set a 2019 target of a 50-50 mix between original and licensed. There has also been plenty of discussion on Disney’s termination of their Netflix partnership agreement and planned launch of their own streaming service — especially with this week’s purchase of FOX assets. However, one of Sarandos’ quotes stood out on his distinction between some of that older television and movie content as not necessarily being a decisive draw to or away from Netflix:

netflix COO

Sarandos is clearly pre-empting the risk of DIS+FOX, indicating that the most frequently viewed series are what really drive performance.

Netflix is looking towards a future of more original content, based off its wild success of “Stranger Things” and other original shows. The service is also expanding its horizons beyond the U.S. with a focus on localized, multiple language shows. While Sarandos seemed to shrug off any concern about the merger and the potential lack of older content that it currently receives from its partnership with Disney (DIS), we think the greatest concern is that the company’s next slate of original content doesn’t match up to the last batch. If Sarandos fails to continually “reinforce the excitement of it”, Netflix could cede its massive gains over the past few years. It remains to be seen whether Disney’s acquisition of Fox poses a real threat with a new streaming service competitor to Netflix.

The 100 Best Twitter Accounts for Finance

Last year, we published our first annual list of the top Finance twitter handles. About a year later, we’ve come back with an update to the dataset.

As a financial research platform built for modern analysts, Sentieo incorporates data from the financial realm of Twitter into its product as part of a curated news stream for each ticker. The 2018 list of handles to follow spans people and organizations with an eye for equities, who offer thoughtful insight and tweet often.

We used a data-driven approach coupled with curated selection to uncover the very best, and we go into more detail on our methodology below. Without further ado here are the top 100 Finance Twitter handles to follow in 2018:

Rank Twitter Handle Popularity Rating Total Followers % of Total Followers
1 John_Hempton 79 24,400 0.32%
2 BarbarianCap 76 21,100 0.36%
3 muddywatersre 73 47,600 0.15%
4 AlderLaneeggs 71 16,400 0.43%
5 CitronResearch 68 60,200 0.11%
6 BrattleStCap 67 18,700 0.36%
7 KerrisdaleCap 65 20,200 0.32%
8 modestproposal1 65 22,700 0.29%
9 marketfolly 65 48,200 0.13%
10 EventDrivenMgr 64 6,698 0.96%
11 ActivistShorts 64 15,400 0.42%
12 Carl_C_Icahn 64 342,000 0.02%
13 LongShortTrader 63 20,000 0.32%
14 DonutShorts 62 10,200 0.61%
15 sprucepointcap 62 10,600 0.58%
16 BluegrassCap 59 16,000 0.37%
17 SIRF_Report 57 8,626 0.66%
18 NoonSixCap 57 8,641 0.66%
19 WallStCynic 57 12,900 0.44%
20 GothamResearch 57 21,900 0.26%
21 herbgreenberg 57 399,000 0.01%
22 Valuetrap13 56 9,514 0.59%
23 valuewalk 56 47,400 0.12%
24 UnionSquareGrp 55 4,922 1.12%
25 PlanMaestro 55 10,200 0.54%
26 ReformedBroker 55 882,000 0.01%
27 SkeleCap 54 6,154 0.88%
28 FatTailCapital 54 6,964 0.78%
29 ShortSightedCap 53 5,642 0.94%
30 footnoted 53 20,200 0.26%
31 Mega_Man_2 52 4,147 1.25%
32 JacobWolinsky 51 5,350 0.95%
33 zerohedge 51 440,000 0.01%
34 FundyLongShort 50 3,585 1.39%
35 MugatuCapital 50 8,890 0.56%
36 DumbLuckCapital 49 4,955 0.99%
37 Hedge_FundGirl 49 5,850 0.84%
38 PresciencePoint 49 9,004 0.54%
39 DavidSchawel 49 30,700 0.16%
40 pmarca 49 671,000 0.01%
41 fundiescapital 48 3,148 1.52%
42 ActAccordingly 48 3,547 1.35%
43 EquityNYC 48 5,223 0.92%
44 nosunkcosts 48 5,674 0.85%
45 MicroFundy 48 7,957 0.60%
46 BergenCapital 48 28,400 0.17%
47 marginalidea 47 1,843 2.55%
48 Keubiko 47 4,542 1.03%
49 Jesse_Livermore 47 37,100 0.13%
50 PainCapital 46 8,446 0.54%
51 EdBorgato 46 8,843 0.52%
52 SmallCapLS 45 2,679 1.68%
53 RodBoydILM 45 3,388 1.33%
54 AlexRubalcava 45 5,828 0.77%
55 LadyFOHF 45 13,000 0.35%
56 activiststocks 45 13,100 0.34%
57 firstadopter 45 33,400 0.13%
58 WarrenBuffett 45 1,310,000 0.00%
59 WSJ 45 14,900,000 0.00%
60 realDonaldTrump 45 39,800,000 0.00%
61 xuexishenghuo 44 2,693 1.63%
62 cablecarcapital 44 3,322 1.32%
63 probesreporter 44 4,082 1.08%
64 GrantsPub 44 25,400 0.17%
65 business 44 4,290,000 0.00%
66 DennyCrane550 43 1,018 4.22%
67 Seventeen_Mile 43 3,484 1.23%
68 StaleyRdCap 43 4,478 0.96%
69 AureliusValue 43 4,660 0.92%
70 Find_Me_Value 43 6,925 0.62%
71 davidein 43 30,800 0.14%
72 maxvision33 42 1,831 2.29%
73 ValueDude 42 1,985 2.12%
74 Fritz844 42 3,321 1.26%
75 plainview_ 42 3,645 1.15%
76 TMTanalyst 42 12,100 0.35%
77 manualofideas 42 17,400 0.24%
78 QTRResearch 42 19,500 0.22%
79 matt_levine 42 59,200 0.07%
80 StrangestTribeX 41 1,324 3.10%
81 LibertyRPF 41 3,500 1.17%
82 AZ_Value 41 3,845 1.07%
83 FCFYield 41 4,562 0.90%
84 GlaucusResearch 41 5,775 0.71%
85 HardcoreValue 41 9,801 0.42%
86 PhilipEtienne 41 10,400 0.39%
87 HedgeyeENERGY 41 11,000 0.37%
88 TigreCapital 40 1,841 2.17%
89 CopperfieldRscr 40 3,336 1.20%
90 covenantlite 40 3,454 1.16%
91 adoxen 40 3,695 1.08%
92 HedgeyeHWP 40 7,934 0.50%
93 mjmauboussin 40 24,500 0.16%
94 TruthGundlach 40 36,400 0.11%
95 bespokeinvest 40 61,100 0.07%
96 UnderwaterCap 39 2,098 1.86%
97 jay_21_ 39 2,303 1.69%
98 schaudenfraud 39 2,808 1.39%
99 JohnHuber72 39 8,949 0.44%
100 mark_dow 39 37,200 0.10%


Methodology

To find the 100 best finance handles to follow on Twitter in 2018, we first developed a curated seed list of ~120 heavy financial users who are active investors and on Twitter. In order to maintain the privacy of these users, we cannot reveal their Twitter handles, but they effectively constitute a panel of experts.

We created a list of all of the Twitter handles that these 120 folks follow on Twitter. We then aggregated this list to find the handles that are most frequently followed across all of the accounts on the seed list. The popularity ranking represents the number of accounts from the seed list that follow the ranked handle. For handles that have the same popularity ranking, they are ranked by the percentage of that handle’s total followers that are on this list (to adjust for larger accounts).

Of course, no list is perfect, there are definitely some false positives and false negatives in here. Overall, though, we think a user interested in staying apprised on equities would be well advised to follow every user on this list.

Note: this list has a decidedly equities-oriented focus, based on the current nature of our product and our interest in information about individual companies. For a more macro/markets oriented list, check out this post from StreetEye.

Assessing Fed Chair Hopefuls With NLP Analysis Of Past Speeches

This article was originally published in Forbes

Our third article on the Fed leverages third-party political trend data as well as powerful Sentieo opinion mining to break down past speeches from top contenders for the Fed Chair. We discuss possible 2018 scenarios and delve deeper into the surprising results we come across. Brush up on the previous articles and see what’s coming up next in our series using the FedSpeak lexicon here:

Sentiment Analysis Of FOMC Statements Reveals A More Hawkish Fed
Why Is The Fed Still Raising Rates? The Yellen Effect
Assessing Fed Chair Hopefuls With NLP Analysis Of Past Speeches
Predicting The FOMC Statement With Beige Book Sentiment Data

From left, Gov. Jerome Powell, Former Vice Chairman Stanley Fischer, Federal Reserve General Counsel Scott Alvarez, and Federal Reserve Chair Janet Yellen, speak together following a Board of Governors meeting. (AP Photo/Andrew Harnik)

We set out to analyze the historical speeches of the top Fed candidates with Sentieo’s natural language processing capabilities and in the process, we learned something interesting. It doesn’t matter.

The Federal Reserve is not a one-woman organization and while the chair tends to drive policy, the minutes reveal that the entire committee weighs in on decisions. Some subtle changes over the course of this year have changed the makeup of the FOMC into a more hawkish committee. Furthermore, the composition of the FOMC will change when four of the regional bank presidents and voting members rotate out for their peers.

Earlier this year, Daniel Tarullo resigned. And just a little over a month ago, Stanley Fischer, a longtime central banker, resigned from Fed Board of Governors. In their place, Donald Trump has nominated Randal Quarles, a monetary hawk who favors a rule-based approach to monetary policy, as vice chair for bank supervision. Unfortunately, transcripts of Mr. Quarles views on monetary policy are not readily available, so he is not included in the quantitative analysis.

Read More

Sentieo Linguistic Analytics – American Express Q3 Earnings

The following analysis was prepared using tools offered by Sentieo. Sign up for a free trial.

While the new CEO was viewed positively by the Street, and was perhaps previewed in a previous call, the conference call event itself showed an increasing divergence in the direction of the discussion between analysts and management, where analysts are focused more on profitability metrics and card program concerns, while management talked much more broadly.  Given this, and the negative divergence in our sentiment metrics between Management and analysts, it would be prudent to be more cautious on AXP stock at these levels.

Here is our linguistic analysis:

American Express announced a CEO change this quarter.  Versus last quarter, management commentary obviously focused mostly on the new CEO and broad commentary around the company.

october-wordcloud

However, the Sentiment Spread, a measure of the bullishness of management vs analysts, has turned down sharply, suggesting over-confidence by analysts.

Read More

Why Is The Fed Still Raising Rates? The Yellen Effect

This article was originally published in Forbes

Our second investigation of the Fed’s sentiment discusses the impact Chairwoman Yellen has had on the Federal Reserve since her rise to the Chair in 2014. We created and utilized our ‘FedSpeak’ lexicon to delve into the correlation between the Fed’s intentions and Yellen’s speeches before colleagues, Congress, and the press. Read the previous article and see what’s coming up next in our series here:

Sentiment Analysis Of FOMC Statements Reveals A More Hawkish Fed
Why Is The Fed Still Raising Rates? The Yellen Effect
Assessing Fed Chair Hopefuls With NLP Analysis Of Past Speeches
Predicting The FOMC Statement With Beige Book Sentiment Data

Federal Reserve Board Chairwoman Janet Yellen speaks during a news conference following a meeting of the Federal Open Market Committee September 20, 2017 in Washington, DC. Yellen announced that the Fed will not change interest rates this quarter. This is one of the last meetings before Chair Janet Yellen’s four-year term ends in February.

The Federal Reserve conducts the nation’s monetary policy under a mandate from Congress to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy.

The Fed began its current round of rate hikes in 2015, and the Fed Funds target rate now stands at 1.25%, up from 0% two years ago.

Read More

Dissecting The Latest Netflix Earnings Transcript

The following analysis was prepared using tools offered by Sentieo. Sign up for a free trial.

We let our data scientists loose on NFLX’s latest conference call transcript. High-level takeaway:  NFLX is sounding a more muted tone while the Street is still excited, and the stock is at a high.

Key takeaways:

1.  Management sentiment has fallen two quarters in a row. (blue line below)

 

2.  The spread between Management sentiment and Analyst sentiment has fallen to a recent low, implying that while Management is getting less bullish, analysts are not yet changing their tone.

spread

Read More

Sentiment Analysis Of FOMC Statements Reveals A More Hawkish Fed

This article was originally published in Forbes

This piece kicks off our new series on the analysis of the Federal Reserve using Sentieo’s natural language processing power and flexible Doc Search technology. We will focus on bringing interesting ideas and surprising revelations derived from thousands of public federal reserve documents. Join us as we scrutinize meetings, congressional testimonies, and press conferences with some truly impressive technology; and see what’s coming up next in our series:

Sentiment Analysis Of FOMC Statements Reveals A More Hawkish Fed
Why Is The Fed Still Raising Rates? The Yellen Effect
Assessing Fed Chair Hopefuls With NLP Analysis Of Past Speeches
Predicting The FOMC Statement With Beige Book Sentiment Data

The Federal Reserve System’s Federal Open Market Committee (FOMC) meets eight times a year, at 2 p.m. Eastern Time in the basement of a nondescript, Washington, D.C. office building. The terse statements released after those meetings drive the direction of global financial markets and the meeting minutes are carefully scrutinized carefully by the media.

We parsed recent statements and minutes since 2012 using Sentieo’s natural language processing and sentiment analysis and found some interesting trends.

For the most recent statement 9/20, the strongest topic continued to be inflation, as highlighted in the unfiltered word cloud shown here.

The intensity was roughly equivalent to the prior statement, as the Fed continues to be vexed by an inflation shortfall versus expectations. Based on the statements alone, this analysis would suggest that Fed intentions have barely changed.  However, when we apply sentiment analysis to the words in the documents using the Loughran-McDonald context-specific lexicon, which assigns a simple positive or negative value to words based on the financial services industry context, the 9/20 statement occurs as much more hawkish.

Read More

Wells Fargo Cross-Sell, Senator Elizabeth Warren And Unstructured Financial Data

On August 31, 2017, Wells Fargo (WFC) announced it completed an expanded third-party review of retail bank accounts which increased the number of potentially unauthorized consumer and small business accounts to 3.5 million from 2.1 million. In addition, an additional 528,000 accounts had potentially unauthorized online bill pay enrollments.

Nearly a year ago on September 20, 2016, WFC CEO, John Stumpf, testified in front of the Senate Banking Committee regarding the “cross-selling” scandal which also cost 5,300 employees their jobs. WFC never provided the “cross-sell” metric in a table format in public filings, and as a result the data cannot be derived from legacy financial research platforms.

During the hearing, Senator Elizabeth Warren highlighted:

  • The word “cross-sell” appeared in every transcript from 2012 through 2014.
  • Stumpf first mentioned “cross-sell” in 2010 AR, highlighting he picked the target 8. He picked the target 8 because it rhymed with great.
  • The correlation between the WFC stock price and the number of times “cross-sell” was mentioned.
  • All 12 printed transcripts were submitted as evidence.

Read More

Sentieo Document Search Weighs In On The Elliott / Arconic Battle

This article was originally published in Forbes.

Earlier this year, Elliott Management, a $31 billion activist hedge fund led by legendary manager Paul Singer, fought a long drawn out battle with Arconic, a metals engineering and manufacturing spinoff of aluminum giant Alcoa. Among the issues to arise from this fight was a particularly nasty corporate governance revelation about a hidden pension liability that takes effect upon a change in control.

At Sentieo, we watched from the sidelines with interest as the story developed, leaning on our indexed repository of public financial documents to uncover the material facts of this case. Our analysis revealed that potential “corporate governance risk” is a hidden aspect of equity investing that even sophisticated investors like multi-billion dollar hedge funds may not have adequate tools to assess.

Here are the facts (throughout the article below we’ve provided links to source documents in our Sentieo public document viewer):

On November 23, 2015, Elliott filed a 13D with the SEC which indicated that it had built a position of over 5% in Alcoa with the intention to influence the company’s management and board of directors.

On February 1, 2016, the company, still known as Alcoa, announced its intention to appoint three Elliott nominees to its board of directors. In November of 2016, the former Alcoa split into the new Alcoa, a pure-play aluminum producer, with the remains of the old company becoming Arconic, specializing in lightweight metals engineering and manufacturing for customers in aerospace and automotive.

Exactly one year later, Elliott Management published a letter to Arconic pointing out that their attempts to privately coax management into making improvements had not succeeded and they felt the need to move their arguments into public view.

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Announcing Our Partnership With 7Park For Alternative Data!

We’re pleased to announce that we are one of 7Park Data’s launch partners for their new API product. Starting today, 7Park customers who also use Sentieo can access their data in Plotter and Mosaic. 7Park’s data offerings available via API include web and mobile app traffic data, retail purchase data, and more.

The combination of 7Park data in Sentieo’s alternative data suite makes discovering alpha opportunities possible without hiring a quant. 7Park Data can be easily added to a chart or statistical analysis including other sources of alternative data, financial metrics like revenue or stock price, and your own data. Examples displaying how this data can be used are presented below.

In the words of one of our customers:

“Sentieo gave me a way to make sense of the data without having to spend budget on a full-time quant. Several points of my returns have been inspired.”

Contact your Sentieo Customer Success rep or e-mail us at hello@sentieo.com to get a demo of how this product can generate investment ideas for you. If you are not a current Sentieo customer, you can request a trial here.