Cyber security has become one of the most important issues in this year’s election, with the leak of hacked emails and the potential for electronic vote tampering commanding the spotlight in recent months. WikiLeaks, foreign hackers, and cyberwarfare have influenced the national conversation and the campaigns. In the first presidential debate, both candidates stressed that cyber security is a top priority for the next President of the United States.
These types of politically-motivated hacks – such as those that plagued the DNC and the email accounts of Clinton campaign staffers – are generally ‘state sponsored Information security breaches’ designed to give the attacker a political or military advantage. A different sort of hack is carried out by non-state ‘independent hackers’ whose purpose is usually financial gain, or occasionally political protest.
Mosaic subscribers were able to preview the quarter using alternative data. Extremely conservative CFO guidance was based on an abundance of evidence of slowing momentum given the recovery in competitor products and channel sellthrough issues.
Are sellside channel checks even relevant anymore?
We have written about cord cutting in the past, and the continued defensive theme is that cable/FIOS and media are converging with cable buying media. AT&T announced a deal to acquire Time Warner (TWX) for $107.50 per share. The next question to ask is why is the stock trading for ~$87.50 today. Can I make $20/share by buying TWX? Let’s evaluate that more closely by using Sentieo’s Doc Search for the merger agreement. See below for the results.
The current state of the residential solar market consists of a fragmented and generally disordered web of solar industry participants. These include solar-photovoltaic (“PV”) system component manufacturers, PV system installers, and customer acquisition-focused sales companies. Additionally, there are a variety of financers catering to power purchase agreements (“PPAs”), leases, and loans, and an array of ancillary businesses related to software ecosystems, PV asset management, data analysis, system monitoring, supply-chain logistics, and more. Through this post I hope to describe the residential solar market in its current state and help fellow investors gain additional color on the industry that they might not get elsewhere. Given the fragmentation mentioned above in addition to the nascence of the industry in general, data integrity is rather difficult to achieve. In an attempt to transform the aforementioned disorder into organized chaos, I’ll first talk about the industry at large before diving deeper into the industry’s different types of players. Finally, I’ll discuss the recent Verengo Solar bankruptcy in the context of this post’s themes. As a global note, my experience has been predominantly in residential solar and thus my thoughts on the solar industry at large have been formed through that lens.
$EBAY has long been one of the most optically undervalued names in the internet space, due in part to disappointing fx-neutral GMV growth over the last few years. Now its position in the e-commerce space is under attack — Amazon is ahead of the pack and likely to stay that way, and the rest of the space is crowded with challengers. Walmart and others are making significant investments in their marketplace businesses and see EBAY as market share opportunity in the space.
Ebay’s main defense against this is a move to a product-based catalog from a listings-based catalog, otherwise known as their structured data initiative. This is meant to improve performance in organic search and product discovery. The latter still needs a lot of work in both of the key elements of discovery: Inventory and Personalization.
Problems with Inventory
I tried looking for a Fitbit and the first result is the very original Charge from two years ago. None of the top 5 models are a new product. Just compare that to Amazon’s search results on the right:
Problems with Personalization
Ebay still has work left to do on personalization as well — just look at the main page screenshots below. When entering my login credentials (right) and without login (left). Most items are either the same product or in a similar category to the rest. There is no personalization here, which is quite sad considering I have made dozens of purchases over the last couple of years.
But Are Things Turning?
Ebay does seem to be making improvements, however. In its Q2 results, EBAY posted an fxn (fx neutral) GMV beat and guided up full year revenues with management pointing to early benefits from the structured data rollout. This coupled with improved profitability pushed the stock up massively.
For Q3, the structured data rollout will continue to be a focus. Our Mosaic data shows some competing trends here. Analysts expect fxn GMV to decelerate (blue line w/ markers), but website traffic (orange) continues to remain at very elevated levels, although the relationship has admittedly broken down a bit. Channeladvisor SSS data (purple) and Google Trends (green) are also ticking up on the quarter but are not indicating a material dislocation vs. expectations.
We also see engagement significantly improving in the charts below, supporting the thesis of an improved user experience. Monthly average pages displayed (left) and monthly average stay per visitor (right) both seem to be accelerating.
EBAY seems to be making some improvements to the user experience and has seen early positive results. While EBAY stands to benefit from the e-commerce wave, it must still navigate a changing landscape riddled with immense competition.
We at Sentieo care a lot about helping Equity Analysts do their job better. That’s pretty much all we do. It’s not just an efficiency argument, that Equity Analysts are expensive and as a population have limited time to cover a large range of stocks in depth. As former buy-siders ourselves, we know what it’s like to continually grind away at an established process that sometimes, to put it bluntly, just isn’t working. As managers of Equity Analysts, we have also felt the struggle of “quality control” beyond boiling the investment process down to rote form filling and box checking. We surveyed the Sentieo community and from our interactions with hundreds of analysts decided to put together broad takeaways. If it helps just one analyst get more effective, we will have done our job.
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.
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