More Facts and Stats That Will Blow Investors Awayhttp://www.fool.com/investing/general/2012/01/09/more-facts-and-stats-that-will-blow-investors-away.aspx Austin Smith
January 9, 2012
"The devil is in the details," they say. But I think that expression could just as easily be "the devil is in the numbers." Numbers matter for investors, so it's incredibly important to understand what they mean.
I spend my days reading about and analyzing stocks, so I stumble across fascinating numbers all the time, but sometimes that leads to being jaded to ordinarily impressive ones. That's why when one really jumps out at me, I have to share it. So here are some of the stats and facts that have made me do a double-take.
2 billion ... and counting
Ever since the company fell from its lofty levels, the bash-on-Netflix bandwagon has become pretty crowded. Though the company has its faults, I believe enough mud has been slung. As fellow fools David Meier and John Reeves noted, Reed Hastings is far from the worst CEO.
People have generally accepted that the future of media delivery is by streaming, and there is no doubt that Netflix is top dog in that arena. But that doesn't mean it faces no difficulties.
While 2 billion hours of streaming content is impressive, because of licensing agreements, those hours could be extremely costly for the company. Unless Netflix is adding subsribers, increased content consumption comes at a higher cost without higher revenue. It's likely that in the recent wave of customer defections Netflix lost its most valuable consumers, those who subscribed but didn't really stream that much, and instead hung onto its worst ones, those who stream constantly. We also have no previous total streaming hours to compare with.
Until that riddle is solved, I'm still on the sidelines. I like Netflix, am encouraged about its international potential, and have given it a thumbs-up in my CAPS profile. But with the stock up 24% in the past month and some questions lingering, I'm holding off for now.
Jeff Bezos has been effectively carving out Amazon Web Services to take advantage of the inevitable push toward cloud technology. As Internet-centric companies like Netflix seek to avoid costly data centers and focus instead on their core operations, Amazon could be their savior.
While Web Services is still just a sliver of Amazon's revenue, it's the early movers with the best foundation that win in a growing industry.
McDonald's (NYSE: MCD