Who Won Black Friday and Cyber Monday? Sentieo Uncovers 5 Winners and 1 Loser

For investors in Consumer Discretionary and corporates operating in that space (retailers, consumer products), monitoring various sources of alternative data is of paramount importance. Search trends (and their year-over-year change), Twitter mentions (with year-over-year changes), web traffic (also with year-over-year changes) alone or together can provide important, real time insights during this critical holiday shopping period. We used a number of these sources, by themselves and combined, to look for standout products and companies. 

All indications point to the 2019 holiday shopping season remaining very strong, with 3.8%-4.2% spending growth expected. Online spending on Thanksgiving Day itself was up almost 15% to a new record high. Adobe’s shopping tracker reported $7.4 bn in online spending on Black Friday, up almost 20% YoY, and another $3.6 bn Cyber Monday, up 18% YoY. 

5 Holiday Winners

 

1. Peloton

Maybe you’ve seen The Ad, and maybe you’ve read about the controversy. Perhaps you liked the ad, or perhaps you did not. But what really matters here is that Peloton, a relative newcomer to the public markets, was able to dominate the conversation for a few days (!) and insert its $2,000 stationary bike + $39/mo sub plan as a possible holiday gift for many consumers this year. Step aside, Lexus! 

Interactive public chart viewer 

 

2. Roku:

We really liked Roku in early 2019 when we released our Sentieo 11 alternative data stock picks: it was the top performing pick in H1. We also included it in our July 13 picks for H2 2019. We discuss the idea in detail, as well as the overall alternative data methodology used, in this webinar from July with our CEO/co-founder Alap Shah and VP of Product Arib Rahman. 

Our alternative data composite index (a multivariate regression for the most predictive basket weights of the available data sets) is pointing to an exceptionally strong holiday season for Roku. We would not be surprised to see a revenue beat (street estimates of quarterly revenue are the dotted green line in the chart; actuals are the solid green line). 

Interactive public chart viewer 

 

3. Airpods: 

Airpods are… seasonal? 

The bluetooth audio/mic earbuds by Apple are hot this season much to our surprise. (Did everyone lose theirs at the same time, or are they now a discretionary accessory?) We can’t be sure, other than what we see in the data: highest ever search interest and seasonal high Twitter mentions (30-day moving average) for the product (starting at $159 in the US for the basic version).

Interactive public chart viewer 

 

4. Rosetta Stone:

Rosetta Stone is a language learning software company that has had its ups and downs over the last few years. We spotted the alternative data index acceleration in our Screener, and we were immediately interested. 

Interactive public chart viewer

The acceleration is due to web traffic: we are seeing a 100%+ spike on a year-over-year basis on rolling 30- and 91-day moving average basis. 

Interactive public chart viewer  

 

5. Five Below:

The discount retailer was also another one of our H1 picks, like Roku and Nintendo above. They reported strong results on December 4th (retailer fiscal years are generally on a January year-end so their earnings season is later than most: see our Q3 machine learning/NLP Transcript Smart Summaries here on real Q3 calls from Facebook, YUM! Brands, Beyond Meat and Merck). We see strong data sets for Five into the holiday season (yet to be reported). 

“Stacked” search trends show annual search trends for the entire year, “stacked” on top of prior years. We see that 2019 has been very good for Five Below, including the current holiday season. 

We are also seeing good web traffic. 

Interactive public chart viewer 

The momentum has meant a great looking Sentieo alternative data composite index for the FIVE revenue growth for the quarter that was just reported, and likely continued strong performance through the holiday season. 

Interactive public chart viewer 

1 Holiday Loser: Victoria’s Secret 

Our pick for the loser this holiday season is Victoria’s Secret, a unit of L Brands. The lingerie brand has seen years of declining search interest and weak comparable store sales, as shown in the table below, which uses our one-click table chaining and extraction tool.

We are seeing very weak search trends compared with the last 10 years!

Note that VS is one of two brands for the parent company, L brands. The other one, Bath and Body Works, has been strong over the last few years. 

To try analyzing alternative datasets for yourself, try Sentieo today.

Taking a Data-Driven Approach to Alpha Generation: Part 1

Over the last few years, we have watched the not-so-gradual evolution of investment marketing, from the rise of indexing and quantitative strategies to an explosion of alternative data and fee compression. The need to “research different” to maintain your edge is greater today than ever before. But despite the changes, there remains one major activity that all successful investors do: correctly identify trends. 

Over the coming weeks, we will cover three different strategies to help you surpass your overreliance on hunches, intuition, or biased views — and start quantifying and visualizing investable trends (so you can ultimately generate alpha faster). You can skip ahead and read the full guided report here.

Today we’re covering everyone’s favorite industry buzzword: alternative data.

“Alternative data,” a broad term that refers to newer data sources, has become increasingly popular over the last few years. From credit card data to search trends, app rankings, and even Twitter mentions, alternative data has become a buzzword as well as a useful tool for research. 

Alternative data can be powerful. But to identify alpha-generating trends, we need more than just one data source, and we need to combine data sources. For example, let’s take a look at clear aligners (the clear plastic trays used for teeth alignment). You might be familiar with the leader in the space, Align Technologies (makers of Invisalign), but there are a good number of recent entrants in the space. These include SmileDirectClub, a DTC (direct to consumer) clear aligner company that recently completed an initial public offering. 

Starting with a very basic alternative dataset, search trends, we can gauge both the direction and the seasonality of the topic. An important point to make here is the distinction between search term (the exact term) versus the broader search topic (which bundles a number of related search terms together). 

Plotting the search interest, we can see that interest in clear aligners has been growing very steadily for the last few years, with peak levels (indexed to 100) happening in 2019. We can also see distinctive seasonality: a drop off into the December holidays, followed by a spike to new highs in January, consistent with self-improvement trends post-New Year.  

Interactive chart http://snt.io/KEF8ejHb8

But search is just a part of the picture. 

Using Alexa web traffic data, we can combine the search interest with web traffic data for the major players in the clear aligner space. While there are “web traffic share” gains and losses, we can see that, as a whole, traffic is increasing across all players: Align, Smile Direct, Snap Correct, Candid Co and Smile Love. 

Interactive chart: http://snt.io/MfF8emuTG

As the final step here, we can overlay the financial and valuation metrics for Align Technologies as the public company in the group with the longest trading history. For clarity, we are “hiding” the non-ALGN traffic metrics. We can see that the search trends correspond very nicely to quarterly revenues (2-year correlation is 0.8), while valuation (EV/Sales here) seems to move based on web traffic direction on shorter time frames. 

Interactive chart http://snt.io/BSF8epB5B

You don’t have to focus on individual securities to use trends in alternative data—it can also be used to detect changes in macroeconomic trends. 

For example, using Twitter as a “repository” for live conversations, we can see that tweets containing “new job” (30-day moving average for smoothing) foreshadowed the increase in the non-farm quits rate by months around 2012-2013. 

Interactive chart http://snt.io/NcF8et44S

Effortlessly combining traditional and alternative data sets in compelling visualization lets you not only see more but speed up your idea velocity in the pursuit of alpha. In the case of clear aligners we can see that there is a very strong, and growing, underlying demand for more convenient, “tech first” cosmetic dental care.

Next week we’ll cover how to capitalize on your internal datasets for alpha generation. If you can’t wait that long, you can download the full report here.

[Guide] Don’t Miss Insights Next Earnings Season: 5 Ways to Optimize Your Time

Why We Wrote This Guide

With companies releasing a multitude of documents every hour of the day during earnings season, getting insights quickly can feel like an impossible task.

The hundreds of companies that analysts track each produce hundreds of data points, documents, and news — any of which could inform a change in corporate strategy or competitive response.

During earnings season, competitive intelligence professionals are often drowning in data, and can miss important insights as a result.

 

 

 

We came up with 5 ways that you (and your team) can optimize your time during earnings. Download the full whitepaper here.

You can easily gain a competitive edge by staying ahead of emerging global or industry trends, including:

• consumer/customer preferences
• trends that are favorable/unfavorable to you or your competitors
• new or disruptive ideas and products

Ask yourself and your team:

What are the macro, global market, and consumer trends happening right now that are impacting my business and my peers?

How To Do It

Alternative datasets can give you great insight into market trends. Try a tool that includes datasets like:

• Twitter mentions – Observe globally trending topics, your competitor’s brand mentions, and their number of followers. Are they spending advertising money on Twitter?

• Alexa website visits – Are your competitor’s website visits going up or down? How come?

• Google Trends – How are people searching for your competitors on the web?

Understanding macro trends can also help you focus your efforts during earnings season. A tool that allows you to plot both financial and document data can expedite this step in your workflow.

In the example below, we plotted document mentions of “wage inflation” (green bars) against EBIT Margins for Cheesecake Factory and Texas Roadhouse (purple & orange lines). We see that as wage inflation has risen, there has been a substantial decline in the margins for the two chains. With visualization tools, CI analysts are able to see the factors that drive trends, and stay ahead of competititors.

Key catalysts to track include earnings announcements, product launches, and transactions. Use a calendar tool that automatically feeds in from your company watchlists.

For example, below we used our watchlist “Big Tech” to auto-populate our Sentieo earnings calendar for easy tracking.

 

Want to learn the 3 other ways that you (and your team) can optimize your time during earnings? Download the full whitepaper here.

Is Pumpkin Spice Over?

About a year ago, we wrote a popular blog post on pumpkin spice season. Based on Twitter data and search trends, we could see that pumpkin spice season had started earlier than ever, and was bigger than ever. 

Today, we declare that pumpkin spice is over, using the same data sets. 

Looking at the stacked search trends below, we can see that pumpkin spice was off to an ever-earlier and stronger season in August, running well above prior years (see light blue line). However, the trend peaked below last year’s peak (momentum investors know this sign), and has been tracking below recent years since then. 

We tracked down a couple of notable pumpkin spice season “kick-off” events this year.

Convenience store chain 7-11 announced that their pumpkin spice lattes were back on August 14, 2019.

Dunkin’ Brands (parent of ice cream chain Baskin Robbins) did not highlight the flavor until August 26, 2019.

Things really picked up in early September with releases from Hostess Brands (Nasdaq: TWNK), Restaurant Brands’ Tim Horton’s division (NYSE: QSR), Krispy Kreme, and others.  

Perhaps the biggest success story this pumpkin spice season came from Hormel (NYSE: HRL), which released a limited edition version of their legendary Spam: “[the] limited edition flavor features a blend of seasonal spices including cinnamon, clove, allspice and nutmeg to give it a subtle sweetness.” The September 23rd release was followed by another press release a few hours later mentioning that the $8.98/2-pack item was sold out from both Walmart’s e-commerce site and spam.com in under seven hours. 

Photo source: Hormel PR

For the final word on pumpkin spice, we used our Twitter data integration to see the trends around Starbucks (Nasdaq: SBUX), and their high-profile pumpkin spice beverages. Based on Twitter mentions, we note that, very much like the search trends, YoY mentions are down, and with a shorter “tail” versus prior years. Pumpkin spice just isn’t that big of a deal any more. (Interactive chart link)

To find out how Sentieo’s full workflow solution can help you harness multiple data sets, track promotional intensity, create visualizations, and more, please get in touch