Netflix soars after boost in subscribers

Investment in original content such as Orange is the New Black appears to be working for Netflix, as the company gained nearly a third more subscribers than expected in the second quarter. Shares soared 9.4 percent at the news to 107 pence per share. Net subscriber additions rose about 94 percent year over year to about 3.3 million in the second quarter, beating the company’s forecast of 2.5 million. Several of its original shows, including House of Cards and Grace and Frankie, have garnered serious attention over the past year. “Subscriber growth was huge domestically and internationally,” said FBR Capital Markets analyst Barton Crockett. “The technology, the breadth of content and the quality of content is really working in their favour.”  

Risk Reward offers investment opportunity on FundingTree

Risk Reward, the global banking and financial services training, consultancy and recruitment specialist, is turning to crowdfunding to raise money to grow the business. Using FundingTree, they are looking for £250,000 in return for 5% equity. Risk Reward is based in London, and has recently opened an office in Miami to service its business in the Americas. The company specialises in risk and compliance training and recruitment, the fastest growing part of the sector. Clients include international training firms and specific banks including the British Bankers Association, GPS, MIS, Al Rajhi Bank, FBN, First Gulf Bank, HSBC, Lloyds Bank, Wells Fargo and many more prominent names. The company’s goals over the next year include additional development of expertise-led recruitment offering and growing the recently acquired Alan Buckley recruitment business. The business has been operating for 12 years, with Dennis Cox as CEO. He has 30 years experience and is assisted by a General Manager who is a chartered accountant with 30 years experience, a head of recruitment with 15 years experience and a Managing Director with 25 years experience. Recent valuations have put the company’s worth between £7-12 million. The expected return in a three-year period is 100%. For more information on this opportunity, visit FundingTree

Central Rand Gold falls

Central Rand Gold fell 23.17% due to a delay in the completion of an agreement for its sale. The company had targeted a completion date for the execution of a binding agreement by 12 June 2015, which wassubsequently extended to 15 July 2015 at the request of both Huili Resources Limited and Hiria Group Company Limited. In a statement, The Board cautioned that “at this time there can be no certainty that the discussions with both Huili or Hiria will lead to a binding agreement being entered into by either party, nor that the potential sale of Central Rand Gold N.V., or any other transaction will be completed.”

Dixons Carphone sees strong results

Dixons Carphone has reported a 21% jump in profits in its first annual results. Carphone Warehouse and Dixons Retail merged last year, and have since reported underlying pre-tax profits of £381m in the year to 2 May, with revenues up 6% to £9.9bn. “This has been a terrific first year for Dixons Carphone,” the firm’s chief executive Sebastian James told the BBC. “We have seen excellent increases in both sales and profitability and we have made very encouraging progress with the tricky job of integrating these two great companies,” he continued. Whilst Greece may be in turmoil, Dixons Carphone’s Greek branch Kotsovolos appears to be unaffected, recording an increase in like-for-like revenues, driven by a strong demand for large screen TVs. “We have a fantastic team in Greece,” Mr James told the BBC. “They’ve been very entrepreneurial in thinking about every possible outcome, and how we would react to it.” However, southern Europe is proving a tougher marketplace, with like-for-like sales down 5%. Earlier this month, Dixons Carphone announced a deal with US telecoms firm Sprint, which could lead to the opening of 500 stores in the US.

Volkwagen affected by China’s slowing auto market

Volkswagen’s Audi is abandoning plans to sell 600,000 cars in China after tepid demand in the market, it was announced today. This comes after China recorded a 3.4% monthly year-on-year drop in new-car sales in June, its first decline in more than two years. China’s Automakers Association also cut its 2015 forecast for vehicle sales growth to a meager 3 percent last week, as a volatile stock market affected sales to consumers concerned about the slowing economy. This slow in growth will come as a blow to Volkswagen, who generate about 37% of its group unit sales in China. Associate earnings from its China joint venture alone accounted for more than 35% of the group’s pretax profit, Morgan Stanley estimates. Volkswagen opened 1.8% higher this morning after EU car registration data showed its biggest gain in 5 years; however, it then fell over 2.6% into negative figures in 4 mins. It has since steadily gained 2.7%. This slowdown in China is likely to have knock on effects for the European auto market. Shares in BMW were also hit this week after its Chinese joint venture, Brilliance China Automotive, warned that profit would fall by 40% in the first half from a year earlier. The auto market could well have an effect on China’s oil prices; their implied oil demand grew 3.5 percent in June, as rising air travel and vehicle usage boosted fuel consumption. However, a drop in passenger car sales and a recent stock market slump could limit demand growth over the next few months.  

Protests rage as Greek government passes bailout proposal

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The Greek parliament has approved a stringent bailout programme, thanks to the votes of the pro-European opposition. The vote took place amongst some of the worst political violence Greece has seen this year. As the debate raged, protesters threw petrol bombs at police, who responded with tear gas. Prime Minister Alexis Tsipras won the vote, with 229 MPs voting yes, and just 64 voting no. Athens has now given the green light for the plan to go ahead, meaning the eurozone should finalise a $7 billion loan today and permit banks to reopen after nearly three weeks closure. However, Tsipras himself didn’t fare well, after 40 of his own MPs voted against the plan saying they weren’t prepared to support measures that they promised they would stand against. Prominent No voters included energy minister Panagiotis Lafazanis, former finance minister Yanis Varoufakis and Parliamentary speaker Zoe Konstantopoulou. Tsipras is clinging onto power for now, and a cabinet reshuffle is to be expected in the next few days. All 28 EU countries are expected to contribute to the bailout, including reluctant non-euro members Britain and the Czech Republic, after a compromise was found and their contributions were promised to be ring-fenced by euro funds.

Greek Parliament continues to debate deal

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Greek MPs are debating the bailout deal offered by the EU containing harsh austerity measures, which must be approved by the end of the day if it is to go ahead. Although Prime Minister Alexis Tsipras has stated that said he does not agree with the deal, he has urged MPs to pass the deal through. With help from the opposition, he vote is expected to pass successfully; however, some hardliners in the ruling left-wing Syriza party are likely to vote against, and the junior coalition party has offered only limited support. The bailout was agreed in Brussels on Monday by eurozone members after months of negotiations.

The end is nigh – Amazon is coming

Today, Amazon turns 20. When it first started out, stories of large companies taking over the world via the internet were the stuff of sci-fi movies, with a ‘Back to the Future’ kind of unbelievability – 20 years on, however, they are alarmingly close to the truth. Nicknamed the ‘Gang of Four’, Amazon, Google, Facebook and Apple have spread their tentacles further than anyone could have imagined. Google log everything you are curious about, Apple know your location every minute of the day and Facebook knows exactly who your ex’s new girlfriend is, because you’ve stalked her so often that they are now suggesting you add her as a friend. Yet still, these companies are continuing to expand. Not content with being the leading e-retailer in the US, specialising in media and electronics, Amazon has now decided to expand into food delivery. From a consumer’s point of view, this may seem like a good thing – who wouldn’t want to One-Click order a curry at the same time as buying their husband’s birthday present? However, Amazon’s decision will be met with fear by many smaller companies. Much like a large predator encroaching on their turf, for many small businesses, it could mean death. One such company is Just Eat, who have thrived since floating on the London Stock Exchange last year. Just Eat is based on the idea of helping independent restaurants thrive in a world dominated by chain restaurants – in order to stay competitive against the big chains, they willing to give up a chunk of their revenue to a tech-savvy middleman who can channel more food orders. Sadly, however, it seems that Just Eat’s time in the limelight is unlikely to last in the face of growing big company dominance; if Amazon and Google decide to expand into an industry, there simply isn’t room for anyone else. “Just Eat is riding high on a theme that has now fully run its course,” said Cyrus Mewawalla, a London-based analyst at CM Research, who recommends selling the stock and ranks it the 6th most expensive among 41 e-commerce companies his firm tracks globally. “Within five years you’ll be able to order a hamburger through Amazon and have it delivered to your front door.” To me, this seems a shame. Just Eat has gone from a Danish basement startup to the London Stock Exchange over the past decade; only to be shot down by a larger company as it gets into its stride. Amazon has a history of gaining control of industries that it moves into; it has already used its vast influence to almost annihilate the publishing industry, paying authors so little for their books that they are forced to turn to crowdfunding sites like Unbound just to make a living. Clearly, the same can be expected of takeaway food. Amazon will use their influence to drive down prices at participating restaurants so that they barely break even; but with the potential of Amazon’s large customer base, they just can’t afford not to take part. Having a world market dominated by a select few companies, we risk creating a monopoly that crushes entrepreneurial spirit and kills competition needed for a healthy economy. Who in their right mind would set up a business to compete against Amazon, with their impossibly low costs and impressive logistics? No one, I should imagine; and therein lies the problem. If things continue as they are, it is no exaggeration to say that the ‘Gang of Four’ may well have the opportunity to rule the world.   Miranda Wadham

Ten Stock Analysis Ratios used by the pros

Are you going far enough in the analysis of your stocks?

Gain access to these 10 key ratios that are used by investment professionals day in, day out.

To give yourself an edge against the market you must dig deeper into the balance sheets, income statements and cash flows of companies to discover which ones are cheap and which ones are overvalued.

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  • Valuation

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The guide you receive will detail how the 10 ratios are implemented and the formulas needed to calculate the ratios.

Each ratio has an explanation of the investment decision process and how you can interpret the ratios. These ratios will give you the ability to sift out the overvalued companies in a sector and those carrying an alarming amount of debt.

We have made a clear and concise PDF version available, you can request it to be emailed to you on the next page. Print this and keep it to hand, ready for the next time you review your portfolio.

 

View the 10 Ratios now:

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Janet Yellen confirms US central bank are on track to raise rates

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Federal Reserve Chair Janet Yellen has announced today that the U.S. central bank remains on track to raise interest rates this year. Her semi-annual testimony stated that with labour markets expected to steadily improve and turmoil abroad unlikely to throw the U.S. economy off track. However, she went on to say that measures “continue to indicate that there is still some slack in labor markets. For example, too many people are not searching for a job but would likely do so if the labor market was stronger. Although there are tentative signs that wage growth has picked up, it continues to be relatively subdued, consistent with other indications of slack. Thus, while labor market conditions have improved substantially, they are, in the FOMC’s judgment, not yet consistent with maximum employment.” She concluded that inflation continues run lower than the Fed’s objective, but “we continue to anticipate that it will be appropriate to raise the target range for the federal funds rate when the Committee has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.” Her written statement to the committee is to be followed by a hearing later.