Last night at the Yale Club in New York, Sentieo was presented with the 2018 HFM U.S. Hedge Fund Technology Award for Best Fintech Provider to Hedge Funds.Arib Rahman, VP of Product at Sentieo, proudly accepted the award for the team.
According to HFM, the HFM US Hedge Fund Technology Awards recognize IT and software providers serving the hedge fund sector that have shown exceptional customer service and innovative product development over the past year. Sentieo has demonstrated excellence in the following:
Customer acquisition and satisfaction
New product development
New thinking and innovation
Alap Shah, the CEO of Sentieo and a former equity investor himself, stated: “We’re honored to be awarded by HFM and are excited to continue delivering a comprehensive product for equity investors that includes easy document search, alternative data, collaboration, and many other cutting edge features that they want and need —in order to be efficient and ultimately more successful.”
Note: The content of this post references an opinion and / or is presented for product demonstration purposes. It is provided for information purposes only. It does not constitute, nor is it intended to be investment advice. Seek a duly licensed professional for investment advice.
As earnings season continues into another exciting week, the Sentieo team has been making their predictions about earnings using alternative data from Sentieo Mosaic. The team accurately predicted the Netflix, Snapchat, Twitter, Skechers, and GrubHub beats, and in Part 2 of our guide, we will be sharing our thoughts on Trupanion (TRUP) and Hubspot (HUBS).
Our Methodology: Why Does This Data Predict Earnings?
In the graphs below, we are presenting Quarterly YoY growth in Google Trends, Website Visits (Alexa Panel), and Twitter Mentions. In all cases, we have compared the data against quarterly revenue growth. Alternative datasets like these are offered in the Sentieo platform and can provide an edge in analyzing consumer-facing businesses, as they often have a high correlation with revenue growth and are available ahead of traditional financial metrics for the period. As consumer behavior shifts more and more towards digital, indicators like these have become more predictive of tech and consumer company results. Below each chart is a link to the interactive version of the graph.
About Hubspot (from Sentieo’s Equity Data Terminal)
Consensus revenue growth expectations (dotted black line) are calling for revenue growth decelerations for Q4 (ending 12/31) and Q1 (ending 3/31). The Sentieo Index (blue), however, is showing a slight acceleration in Q4 and is showing a continued acceleration based on quarter-to-date data for Q1. This suggests a potential beat-and-raise for HUBS this afternoon.
About Trupanion (from Sentieo’s Equity Data Terminal)
YoY Google Trends (green) has shown a decent correlation to Revenue Growth (black) over past twelve quarters while Twitter Mentions (blue) has correlated a little bit better over more recent quarters. Consensus expects revenue to see a large deceleration for Q4 (dotted black line).
Note: The content of this post references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
With earnings season in full force, the Sentieo team has been making their predictions about the earnings announcements from major companies, using alternative data from Sentieo Mosaic. The team successfully predicted the Netflix and Snapchat beats, and in this report we will disclose our thoughts on TWTR, SKX, SODA, and GRUB.
Why does this data predict earnings?
In the charts below, we are presenting Quarterly YoY growth in Google Trends, Website Visits (Alexa Panel), and Twitter Mentions. In all cases, we have compared the data against quarterly revenue growth. Alternative datasets like these are offered in the Sentieo platform and can provide an edge in analyzing consumer-facing businesses, as they often have a high correlation with revenue growth and are available ahead of traditional financial metrics for the period. As consumer behavior shifts more and more towards digital, indicators like these have become more predictive of tech and consumer company results.
Below each chart is a link to an interactive version of the graph.
After years of struggles, Twitter finally seems to be taking the steps it needs to come into the modern era and properly engage and monetize its massively unique user base and content. By increasing character limits, improving navigation, driving more usage through better notifications and alerts, and by focusing more on video, Twitter is growing DAUs and revenues again. The stock has surged recently but there appears to be much more upside. Website Visits to twitter.com (Total Visits = red line) have shown a strong relationship to TWTR’s revenue growth (black line) historically. The website visits data is pointing to ameaningful acceleration for FQ1 (12/31) while Street estimates are not.
Google Trends searches for Skechers (green line) and Website Visits to skechers.com (red line) have accurately signaled major inflections in $SKX’s revenue growth (black line). The Google Trends data, which has the best correlation, is calling for a huge acceleration in FQ1 (12/31). However, the FQ2 (3/31) Google Trends data (based on 4 weeks of data) is signaling a very large deceleration.
When you peel back the onion, you see that this is a tale of two geographies. The international business has driven all of the recent growth acceleration, while the U.S. seems to be off to a bad start in FQ2 (see below).
While the U.S. side is off to a tough start to 2018, we think the biggest point of surprise on the print will be the massive reacceleration in international during FQ1, and the likely improved FQ2 guidance for international.
Overall, we expect a beat on the upcoming earnings call as laid out in detail in our recent blog post.
$GRUB’s YoY Website Visits (Alexa Panel- red line) have shown a strong relationship with revenue growth (black line). The website visits data has also moved in the same direction as revenue growth and agrees with consensus expectations for an acceleration for the 12/31 quarter. So far in the next quarter, the data is continuing to accelerate with consensus revenue estimates expecting a deceleration, signaling a potential change in guidance coming on the call.
SodaStream ($SODA) – 2/14 (Pre-Mkt) – Revenue Beat and Raise
YoY Google Trends searches for Sodastream (green line) have moved in the same direction as revenue growth (black line) during each of the last 6 quarters. Google Trends and Consensus Revenue are in line for FQ1 (12/31) but are massively diverging for FQ2; this suggests a likely beat and raise for the quarter.
Skechers USA (SKX) is a lifestyle and performance footwear brand that was founded in 1992. We looked at Skechers’ recent performance using Sentieo Mosaic to assess how they will perform on their next earnings call on Thursday of this week.
SKX started off with a strong rally in October that included an earnings beat and raised guidance. However, Skechers still hasn’t gotten the deserved love from the market yet.
SKX trades lower than its peers, both in the shoe segment and in the athleisure industry, trading at just 9.5x full-year EV/EBITDA, quite a low multiple compared to its closest peers. The chart below plots 2018 CY EV/EBITDA vs. 2018 CY Revenue Growth, showing that Skechers is not getting the multiple it deserves based on revenue growth.
The Street seems to doubt Skechers’ profitability since margins have been a bit volatile in the past. It seems that the market has only started to recognize Skechers’ growth recently, after seeing the better-than-expected operating margins last quarter. Skechers operates in a segment of the footwear market that doesn’t give the company the pricing power and margin stability of a market leader like Nike.
In any case, as the most recent earnings release showed, the Street didn’t properly forecast Skechers’ operating margins. Analysts questioned the company’s ability to deliver necessary operating leverage while the domestic market was showing signs of uncertainty. Operating margins were roughly a 20% beat over analyst estimates, and only part of the better-than-expected EPS was a result of a more favorable tax rate.
The strong rally during the past few months was bolstered by the buzz around Trump’s tax reform and the positive effects that a lower tax rate would potentially have on Skechers’ bottom-line. However, it seems that the market has failed to keep up with the pace of Skechers’ improving fundamentals.
The black line in the chart below shows the YoY revenue growth, with the solid part showing and actuals and the dotted part showing analysts’ expectations. The Sentieo Index (which includes alternative data sets such as Google Trends and Twitter) demonstrates Skechers growth potential (dashed blue line), while Wall Street has very low expectations for revenue in the next few years, forecasting a significant deceleration (again, dotted portion of the black line). Analysts haven’t adjusted their expectations enough, and it’s likely that a big revenue beat is coming both in Q4 and in the following quarters.
Wall Street continues to be skeptical about Skechers’ acceleration, despite underestimating Skechers’ revenue growth for four consecutive quarters and getting the margin picture completely wrong. Analysts also don’t seem to understand that Skechers’ management is offering particularly conservative guidance numbers, and has been mentioning better-than-expected results for a while.
In Q2, the management offered the following guidance:
Both revenue and EPS were far above those levels, surpassing the higher end of the management’s guidance.
Something similar occurred in Q2, when revenue growth definitely surpassed the upper end of the management’s guidance. In the excerpt below, management highlights that the results were well above their own expectations:
Perhaps management wants to set expectations low, or perhaps they have actually underestimated the sales acceleration. In any case, it’s probable that they have undervalued the potential growth in Q4 just as they did for the previous two quarters.
With sales guidance for Q4 at $860 to $885 million, the implied Y/Y growth rate would be between 12.5% and 16%, basically just in line with Q3’s growth rate even if we use the higher end of the guidance range.
The Sentieo index tells us something different. Since management has provided its guidance, the index has significantly accelerated, showing a strong confidence in Skechers. The guidance for Q4 was provided just before an inflection point of strong acceleration, shown by the Sentieo index dotted line below:
We’ll be tuning into the earnings call on Thursday to see if Skechers has underestimated their performance again. To continue tracking SKX, and to study other tickers using our alternative dataset tools, sign up for a free trial with Sentieo.
How TableX Helps You Find, Organize, Audit, & Extract Non-Standard Data
Tired of digging through documents and manually inputting numbers to build your models? As former analysts ourselves, we built Sentieo’s TableX from the ground up to save you hours of unnecessary work — with functionality you can’t get anywhere else. We built TableX years ago, and have been making continuous improvements to the natural language processing technology in order to add functionality and make it more accurate. Stay tuned for some major upgrades over the next two months as we level up the technology.
What Is TableX?
Table X helps analysts find, organize, audit, and extract data easily.
Let’s say we want to look at Apple’s iPhone unitssold. We open up Sentieo Document Search, enter the Apple ticker, and query “IN:TABLE iphone NEAR10 units.” (See screenshot below). We choose the 2017 FY10K and see the mention of iPhone sales highlighted in yellow.
From here, we can do a few things. First, we can Export Table to Excel (see 1 below).
When you click this button, Sentieo will download a cleanly formatted Excel file for you, saving you countless hours of copy-pasting and formatting:
Let’s say that you would also like to reference this table at a later date. Simply press the Highlight Table button (see 2 below)to send a copy of the table to your Sentieo Notebook:
The table will automatically get tagged with the appropriate ticker, and labeled for easy search and recall. You can see the saved table below in our Notebook:
One of the most useful TableX tools is Similar Tables, a feature that is unique to Sentieo. If you click the Similar Tables button, you can easily compare similar tables from different points in time.
This function allows you to compare your current table to its historical equivalents. On the left is the table we just found (Q4 2017), and on the right is a similar table from the prior quarter. If you click “Next” on the far right, you can see the table from Q2 2017 and earlier. Similar Tables saves analysts hours of time they might usually spend searching for, exporting, and comparing historical tables side by side.
Time Series takes table comparison one step further (see 4 below).
With Time Series, you first choose the data you’d like to compare over time. (See checked row below: “iPhone”)
After selecting the line item(s) you want to examine, Sentieo will crawl through and extract values for this line item in any document type that you checkmark on the left hand side (see below).
You also have the option to Export to Excel and dump the numbers into your model, Open in Plotter to visualize any trends in the data, or Save Series in order toreference these values at a later time.
This all works well for SEC filings. But what if you want to extract a table out of a PDF research report or investor presentation. Our technology can handle that too. All tables in PDFs have an “Export Table” button to put that data directly into Excel, like this table on Netflix Streaming drivers from a JPM research report:
Check out thevideobelow for a full walk-through of all TableX features, with the use case being that you’re on the phone with Apple’s management team and they’re talking about the iPhone’s pricing power. You need to check if what they’re saying ties to the financial data — in under 120 seconds:
Stay tuned for TableX updates to come! We’re a month or so away from a TableX release that will make data extraction and analysis even easier. To try it out for yourself, get a free trial of Sentieo today.
With earnings season upon us, we’ve got our eye on Netflix, one of the first earning calls of the week.
We used Sentieo’s Mosaic feature to quickly plot a couple graphs on Netflix, which we anticipate will beat estimates in subscriber growth based on alternative data.
Check out the Google Trends (green dash), Alexa Website Traffic (red dash), and Twitter Mentions (light blue dashed) for $NFLX above. They have all led subscriber growth movements (solid blue). For Q4, analysts are expecting a subscriber growth to decline from 26% in Q3 to 23% in Q4 (dotted line). Google/Twitter/Alexa are trending up, suggesting upside to consensus estimates.
We also looked at the Twitter mentions for specific Netflix shows below. The second season of Stranger Things was described as “one of the biggest entertainment phenomena on the planet” by Chief Content Officer Ted Sarandos at the UBS conference last December. The cultish following of the show is certainly reflected in the chart below by the huge spike in Twitter mentions when it was released around Halloween.
We’re eager to log into Sentieo and check out Netflix’s full 8-K that it released today, as well as its press releases, presentations, and much more. You can view all this too by signing up for a free trial of Sentieo. Why not get your research done faster?
With this week’s bold announcement by Laurence Fink, founder and chief executive of BlackRock, we thought it’d be a perfect time to show you how to search for the CSR initiatives of public companies within Sentieo.
This week, the executives of many large public companies received a letter from Fink which suggested that they not only make profits for shareholders, but also that they engage in social good if they desire the backing of BlackRock:
“Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.” (NY Times)
With climate change, workplace culture, and data security making headlines recently, we wanted to see how much companies are really discussing corporate social responsibility (CSR) and environmental social governance (ESG).
We did a quick search in Sentieo to find mentions of these themes in earnings calls transcripts, press releases, presentations, and sustainability disclosures (red bars below), as well as keyword mentions on Twitter (green line below).
There has been a drastic increase in public companies’ focus on “social good” topics over last 10 years, mirrored by a parallel jump in Twitter mentions. We expect this trend to only continue in the next few years as announcements like BlackRock’s become more common, and companies take a closer look at contributing to sustainability projects, growing workplace diversity, and giving back to their communities.
A few well-known companies appearing in our search results that are already incorporating corporate social responsibility into their future plans are: Hasbro (HAS), Cisco (CSCO), and Herman Miller (MLHR). Check out one of Hasbro’s press releases below:
Cisco (CSCO) also had a full report on 2017 Corporate Social Responsibility:
We also used Sentieo Plotter to plot the mentions of “corporate social responsibility” across Cisco’s documents over the last 10 years (red), Cisco’s stock price (blue) and Twitter mentions of “corporate social responsibility” (green). All three have steadily increased over time.
As both consumers and investors take a more critical eye to how products and services are created and delivered — demanding full transparency — public companies will need to take an honest, internal look at their social impact and how it will affect their ability to succeed in the future.
Today we’re revealing our very first Quarterly Report— a summary of last quarter’s top keyword searches, as well as a detailed sentiment analysis across all industries. We used Sentieo to analyze earnings call transcripts to discover what companies talked about most last quarter versus the same quarter in 2016.
We also compared the sentiment of management and analyst sections of transcripts, and graphed these data points so you can easily see trends or discrepancies between the two. We’ll be publishing these reports every quarter, so you can stay updated on information that could impact your investment decisions this year.
Here are some interesting themes that came up in our research:
Trump mentions have leveled off over the past few quarters as the buzz about his presidency has died down
Crypto mentions have doubled in the last quarter and are poised for another jump next quarter
Artificial Intelligence mentions have doubled in the last year as it has become a major buzzword in the tech sector
Philip Morris IQOS smoking system a market leader
Puerto Rican healthcare crisis was a key focus
Real Estate Sector
While the San Francisco real estate market cooled off a bit, Amazon was mentioned by a lot of real estate companies with regard to “HQ2”
With Sentieo Document Search, and with this report, we are starting down the path of quantifying linguistic data. This report is actually a preview of some exciting features that are currently in development for the Sentieo platform. We’d love to get your feedback on what you liked and didn’t like and what you want to see in the product.
You’ll see our fully fleshed-out analysis in the downloadable report, which covers these industries and many more.
Check out this sample page of our report about the utilities sector:
To read our full analysis of the utilities industry and other verticals, influential companies, and trending keywords/concepts, download the full, free report!
2017 was yet another big year for product development at Sentieo. We continued to add powerful features to help our customers take their research process to the next level. Take a look below to see just a few of the innovations from 2017!
Robust, Global Financial Data Coverage
We now have full global coverage of company fundamentals in all international geographies. We added data from 50k+ global tickers on all major exchanges, from Reuters Fundamentals.
Redesigned Equity Data Terminal
Our new financial model has a more detailed, robust methodology that seamlessly integrates historical reported data with forward analyst estimates in a sleek, updated user interface.
Valuation & Price Target Tool
The new Valuation & Price Target tool takes target price setting to a new level of simplicity.
Enter the price you think is fair for any of the forward years, and Sentieo updates the valuation multiples. You can also enter what they think is a fair multiple for any of the forward years or for any of the forward multiple metrics, and it will update all the other valuation multiples and the price target accordingly. Both work seamlessly on the same page; you can jump from one method to the other.
Searches Made Easier
Users can search our ever-growing library of over 500 unique, pre-built search queries across various industry sectors & themes to find the most relevant data.
PowerQuery: Complex Query Operators
Within our DocSearch tool, our search operators provide you with finer control over your searches so you don’t have to sift through unwanted results.
Section-Specific Searches Within 10K’s & 10Q’s
When working with quarterly and annual reports, filter your search at the section (item) level; you can focus your search on financial statements, Management Discussion & Analysis, risk factors, & more.
ESG Reports (Sustainability Disclosures) & Federal Reserve Documents
We’ve added Sustainability Disclosures to our searchable documents, in addition to FOMC meetings minutes, statements, press conference projection materials, and speeches, which can be found under the ticker FED-RES.
In-Depth Ownership Data In Shareholder Data Explorer
Easily look up a ticker in our Shareholders tool to access a list of every publicly disclosed shareholder for that company. Look up an institutional holder to find a history of all its disclosed shareholdings (updated quarterly). You can also find the history of a U.S. company’s executive dealings (updated daily).
We’re really proud of what we accomplished this year, and we’re working to make 2018 an even more successful year, delivering the features you need to make your life easier. Got feedback or ideas? Get in touch with us.
Nine months ago, in the early days of what has been an incredibly volatile presidential administration, we put out the Trump Tracker to keep track of what companies were saying about President Trump. Today, as the world goes crazy for cryptocurrencies, the Sentieo team is excited to introduce the Crypto Tracker. It’s a bot that constantly scans new public financial documents for mentions of cryptocurrencies and blockchain technology. These documents include all SEC filings, earnings call transcripts, investor presentations, press releases, and more. The bot instantly surfaces new mentions of cryptocurrency as soon as they’re published, while intelligent queries automatically sort them into topics like bitcoin, ripple, ethereum, ICOs and more.
Anyone interested in following the cryptocurrency impact on public companies can engage with the Crypto Tracker by checking the dedicated website, following the @cryptotrackerbot Twitter account, or signing up for a daily email alert on the site.
Is Cryptocurrency Just a Bubble?
Some experts believe in the truly disruptive power of cryptocurrency, including MIT researchers who argued earlier this year in a Harvard Business Review article that “[blockchain] will do to the banking system what the Internet did to media.” However, other prominent financial leaders have called bitcoin a “bubble”, including Ray Dalio (who runs the largest hedge fund in the world), Jamie Dimon (who runs the largest bank in the US), Warren Buffett (the fourth richest person in the world), and Robert Shiller (Nobel-prize winning economist).
The Crypto Boom
We’ve been keeping our eye on cryptocurrency using our research platform, Sentieo. For example, we used Sentieo Document Search to search mentions of cryptocurrency and its synonyms across earnings call transcripts and press releases over the last two years. Then we used Plotter to quickly graph these mentions so we could easily see trends. Mentions have steadily increased over time, with a huge spike during the week of November 27th, when Bitcoin’s value reached a high of $9,721 and was worth more than seven times an ounce of gold. Since then, it has been a crazy ride, and companies continue to talk about cryptocurrency in filings, transcripts, and press releases.
The Crypto Leaders
The cryptocurrency leaders are constantly changing, with the top 5 or so surpassing and falling behind each other depending on the day.
Bitcoin is likely the most well-known cryptocurrency, released first as an open-source software in 2009 by an unknown person (or group of people) with the alias Satoshi Nakamoto. Bitcoins can be used to make purchases anonymously. They are not tied to any country, nor subject to regulation, making international payments with Bitcoin simple to execute and inexpensive.
LiteCoin describes itself as a peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone in the world. It is an open source, global payment network that is fully decentralized without any central authorities. It was also released as an open source software in 2011 by former Google employee, Charlie Lee.
Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference. These apps run on a custom built blockchain, a shared global infrastructure that can move value around and represent the ownership of property. Ethereum was initially proposed in 2013 by Vitalik Buterin.
We used Sentieo to graph the price increases of Bitcoin, Litecoin, Ethereum, and a fourth currency called Ripple over the past year. Towards the end of November and into December, each currency spikes so rapidly the graph is hard to read. Cryptocurrencies are growing so fast that “exponential” doesn’t even appropriately describe the growth rate.
We also used Sentieo Mosaic to look at the popularity of Bitcoin, Litecoin, and Ethereum over the past year as expressed by Twitter Mentions and Google Search trends. This graph also becomes unusable toward December due to rapid growth, but Sentieo users can drill in further to find correlations between these trends and crypto prices.
We’ll be continuing to get updates from the Crypto Tracker through the end of the year and 2018, to see if crypto is just a bubble — and if so, when it will burst.
Sentieo is a research platform built by former hedge fund analysts to speed up the research workflow.
Nothing on this website should be considered investment advice. We do not make recommendations (long or short) in any securities. We do not express opinions as to whether any company's accounting practices are in violation of SEC, GAAP, IFRS or other rules/regulations.