01. February 2021 | 07:00 CET
Netflix, Aspermont, Alteryx: When data becomes profit
Data is increasingly seen as a commodity. Why? The better you can process and use data, the more valuable it becomes. Traditional commodity companies are increasingly equipping their heavy equipment with sensors to profit in the long term from the treasure trove of data that they have so incidentally unearthed. Companies such as Facebook and Alphabet are taking advantage of all our data, developing new products and making huge profits. Read what role data plays at Netflix, Aspermont and Alteryx.
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ISIN: AU000000ASP3 , US64110L1061 , US02156B1035
"[...] We have accumulated a network with over 7 million board, senior management, and key decision maker contacts in our 3 primary industries – mining, energy and agriculture. [...]" Alex Kent, Managing Director, Aspermont Limited
Netflix: Know your customers!
Most people today have some idea of the Netflix business model. Even those who are not users are familiar with the principle of Prime Video or comparable services. The days when the family took their seats in front of the TV at 20:15 at the latest are over. Today, programming is geared to the needs of consumers. Netflix analyzes the viewing behavior of its users. Since Netflix also commissions its content, which costs billions in production costs, it also consistently gears its long-term planning to the user.
Now and then, the Company allows itself test balloons. These contribute positively to Netflix's image as a driver of innovation even if they fail. It pays off for Netflix - the number of customers is growing. Also, the growing experience with its own content makes it increasingly easy for the Company to make the right strategic decisions. The more data from users goes into those decisions, the better Netflix can position itself for the future. The stock has long been considered overvalued, but the business model simply has a future. Over the course of a year, the stock has risen by more than 40%. In Germany, the stock is trading within its sideways range between USD 400 and USD 485. Traders should take their cues from these levels.
Aspermont: Traditional Company with a wealth of data takes off digitally
Investors who like to base their trading on a chart have some problems with Aspermont: Like so many companies from "Down Under," the Australian media Company with a combined brand history of 560 years has a whopping 2.28 billion shares. As a result, the stock doesn't make the very best first impression on European investors' price sheet. However, investors should not be deceived and should do their research carefully, especially when it comes to Aspermont. The media Company operates traditional titles such as Mining Journal and Mining Magazine, both of which have been published without interruption for more than one hundred years and have a great name in the industry.
In addition to mining-related publications, the media company also has its sights set on the energy and agricultural sectors. In an interview last week, Managing Director Alex Kent traced the Company's development in recent years. After a lean period, Aspermont is now focusing on digital content and is making such good progress that cash flow is now strongly positive, and it plans to invest in organic growth.
Long-standing customer relationships, which the Company maintains with the world's largest companies, also play a significant role for Aspermont. In this way, it succeeds in significantly expanding existing subscriptions. Alex Kent cites the example of a customer who has extended his subscription for three users with a total volume of EUR 500 per year to EUR 34,000 per year. This growth succeeds because Aspermont has maintained direct contact with its customers for years and has never outsourced this to agencies. It is also Aspermont's philosophy to offer customers individual solutions - this also includes sharing content within the industry.
What initially sounds like a losing proposition, Managing Director Kent describes as "the best sales model for our target industries." Now that Aspermont is earning good money with its products and increasingly monetizing its long-standing customer relationships, the Australians are looking ahead and want to launch more promising products around eLearning, trading platforms and blockchain. The share got off to a furious start in Germany, but the market capitalization is still only slightly more than EUR 20 million.
Alteryx: The data specialist with the horror chart
Another company that wants to turn data into money is Alteryx. The US Company specializes in analyzing various data sources to optimize business processes and productivity. Alteryx's customers include Chevron, Nasdaq and - Netflix. On a one-year view, however, the stock lost almost 20%. In addition, the stock thrives on drastic drops and spectacular breakouts - so the chart picture for Alteryx looks a bit wild and does not exactly invite investors.
The Company is valued at more than EUR 5 billion on the stock exchange. On the one hand, this represents a certain solidity. Still, it also inhibits the potential for surprises - new products or developments that exceed expectations will not give the share any excessive impetus. The situation is similar for the streaming pioneer Netflix. The situation is different for the relatively unknown Aspermont. The treasure trove of data there is based less on randomly collected data than on years of customer relationships and careful cultivation. Since the Company is already generating cash flow and is taking off digitally, the investment story offers more significant surprise potential than established stocks.