Introducing Sentieo Capture: Clip and Save Document Content into the Sentieo Notebook

We recently introduced an enhancement to our document markup functionality: Sentieo Capture.

Within documents in Sentieo, you’ve had the ability to highlight, annotate, and tag your colleagues within important passages of text. Oftentimes, you’ve also come across important graphics such as charts or tables that you may have wanted to collect and save.

With Sentieo Capture, you can now:

  • Capture any portion of a document (such as a capex breakout slide from a company’s investor presentation).
  • Mark up the capture with shapes, arrows, and lines of text.
  • Save the captured area as an image (along with the source document) directly into your Notebook.
  • As with highlights, you can also add label(s) and annotations to your captures.


Why Should I Use Sentieo Capture?

While performing a deep dive analysis on a company, investment professionals are likely to face information overload, which can make it challenging to effectively manage all the information being consumed. Ultimately, effectively managing information and data becomes one of the key skills of a successful investment professional:

  • How do you collect information snippets from the documents you are reading, and then create a summary report?
  • How do you record the link (URL) to remember the source of the document along with your information snippet?
  • How do you organize the information you’ve collected so that you can easily retrieve it at a later time?
  • When collaborating with others on your team, how do you efficiently share and update this information?

You have probably used various tools to tackle these questions, including the Windows Snipping Tool, MS Outlook, MS Word, MS OneNote and Evernote. These are all great tools and have their own particular strengths, but they do not solve the a major problem in the investment professionals’ information capture flow: having to source, organize, remember, and be able to retrieve your research.

At Sentieo, we are building features to replace the fragmented information capture workflow to become a one-stop solution for managing, sharing, and retrieving the information you’ve gathered on a company or topic. That way you can come up with a meaningful conclusion using all of the information you’ve gathered, and not just bits and pieces. In this post, we’ll nudge you into trying a slightly different approach when doing your company research in Sentieo.

 

How Do I Use It?

The Capture feature can be triggered via the photograph icon located in the upper-right corner of the document that you are viewing. There is no real setup required other than making sure that you have installed the Sentieo Chrome extension, which you will be prompted to do if it is not already installed.

To enable capture mode, simply click the “Capture” button on the toolbar while viewing any document within Document Search or your Notebook:

 

Begin your capture by selecting the area you would like to capture and clicking and dragging:

A new screen with your captured area will appear, allowing you to:

  1. Name your capture
  2. Mark up your capture with the annotation tools menu
  3. Copy to clipboard, e-mail out, or save the image to your computer
  4. Add a label or annotation to your capture
  5. Save or discard your capture

Where is this information being stored, and what can I do with it?

All of your bookmarks, highlights, annotations (and now captures) are also stored and searchable within your Sentieo Notebook. This also means that your information is available from any computer with Google Chrome and an internet connection.

Like highlights, all of your captures are automatically sent to your Notebook and populated with the source document title and filing date, any relevant company tickers, and any labels and annotations. This automatic tagging makes retrieving your highlights and captures a breeze in the future.

Additionally, you can share selected research with the rest of your team and people outside of Sentieo. You can also view what others have shared with you.

 

We hope that Sentieo Capture saves you more time and keeps your research more organized. Give highlighting and Capture a try; you won’t want to do your Sentieo research without it! Please message us via customer support chat, or email nauman@sentieo.com with any feedback on the functionality that you would like to see added to the new capture feature! Haven’t used Sentieo yet? Get a free trial.

Save Time Analyzing Off-Balance Sheet Commitments with Sentieo

Not all contractual obligations that result in cash outflows are listed in a company’s balance sheet. Looking purely at debt figures leaves an incomplete picture of future funding needs. In this blog post, we will find and visualize these liabilities in several examples across industries. While most analysts are very familiar with common items like operating leases and post-retirement healthcare liabilities, here are a few other items that we found.

We compiled these using the search term “Contractual Obligations” in Sentieo’s Document Search, and then built a Time Series chart using the Sentieo Time Series function to export from the 10-K or 10-Q. Lastly, we displayed the data in Sentieo Plotter.

Netflix: The online streaming hegemon has over $18 billion in future content liabilities. That’s a lot of binge-watching! The number has been growing steadily every quarter. Public chart viewer: http://snt.io/3YEv9pLtK

Nike: The dominant athletic footwear and apparel maker is known for its high-profile athlete endorsements. But these contracts do not come cheap; Nike’s 10-Ks show a growing off-balance sheet liability, now at over $10 billion. Public chart viewer: http://snt.io/aeEv9rCv9

Waste Management: The leader in waste management has over $3 bn (and growing) in environmental-related liabilities around the closure of garbage facilities at the end of their useful lives. Public chart viewer: http://snt.io/rcEv9sR9C

Vulcan Materials is a large supplier of aggregates (like sand and crushed stone) to the construction industry. We plotted the mineral royalties that they expect to owe to the property owners of the sites that they operate. Public chart view link: http://snt.io/fNEv9srx4

Valero, a large oil/petrochemical refiner, has over $30 bn in purchase commitments, mostly crude oil. The numbers have stayed fairly steady over the last 10 years. Public chart viewer: http://snt.io/EgEv9vTXr

Finally, our favorite find: Deckers Outdoor Corporation. This parent company of the UGG brand has purchase commitments for (you guessed it!) over $100 million dollars of sheepskin. This is a new disclosure; only two 10-Ks have it, so we are not showing a bar chart.

Sentieo Guide: Quick Tips For Starting a Hedge Fund

Chances are that you’ve thought about starting your own hedge fund. Perhaps you’ve felt an entrepreneurial pull, have an investment strategy in mind, or know a team of people with a similar goal.

Below, we’ve compiled a list of some of the best guides we’ve found online.

 

Resources:

Business Insider

Investment Law Group

Grant Thornton / Stonegate Capital Partners

Hedge Fund Law Blog

Investopedia

Vanity Fair

Mergers and Inquisitions

HFM Global

Hedge Fund Seeders

Hedge Fund Technology

Hedge Fund Law Firms

 

If you’d like to download Sentieo’s full, comprehensive guide that pulls together the best advice from all of these sources —  including legal advice, raising capital, office space, building a team, and more — download the full whitepaper.

Here are the topics that the guide covers:

  • Fund Structure
  • Raising Capital
  • Building a Team
  • Legal Considerations
  • International Considerations
  • Office Space
  • Technology Stack
  • Naming the Hedge Fund

 

“Pumpkin Spice” season starts earlier than ever, and is bigger than ever (at least on the internet)

Do you ever feel like Pumpkin Spice season seems to start earlier and earlier? Well, it’s true. It’s also bigger than ever — at least in Search.

Sentieo’s Mosaic pulled ten years of “pumpkin spice” search data, and we see some clear trends. Pumpkin spice season was typically off to a slow start, building up to a spike around Thanksgiving in late November (and we see the late November spikes on different days as Thanksgiving moves around).

We also see that over the last ten years, the pumpkin spice season has been starting earlier, and search volume in September/October has started to dwarf the previous peak around Thanksgiving. Finally, the pumpkin spice volume peaked in early September this year!

We are also seeing the term “pumpkin spice” appear across corporate communications: press releases, transcripts, and presentations. Using Sentieo’s thematic search, we looked for “pumpkin spice” across all corporate communications. We see a range of pumpkin spice products from Dunkin, Coca-Cola, IHOP, and even a pumpkin spice Baileys coffee liquor from Diageo.

And, of course, the 800-pound pumpkin spice gorilla is Starbucks: the company announced in a tweet that its legendary pumpkin spice latte is back on August 28th. Below, we used Sentieo’s Plotter to look at the frequency of pumpkin or PSL mentions from the Starbucks Twitter account.

Interactive chart

Locating Transaction Comparables in Fairness Opinions with Sentieo

A fairness opinion is a report, usually created by an investment bank, showing that a contemplated strategic transaction (such as a merger) is fair to the shareholders who are represented by the company’s Board of Directors. A fairness opinion will typically contain carefully researched and adjusted trading and transaction comparables.

Fairness opinions are used by buyside and sellside analysts to analyze transaction multiples and trends. They are used by activist investors who might feel that the target is undervalued and look to exercise their appraisal rights in court. In a similar fashion, securities litigation specialists might look at the documents while seeking compensation on behalf of shareholders. Finally, fairness opinions are looked at by corporate M&A/development professionals who monitor their own or adjacent industries.

Fairness opinions are usually rendered after the transaction has been announced, and they are filed with the SEC. However, a merger or an acquisition typically creates a deluge of filings from both parties, making locating this important document time-consuming, as there is no special SEC form for fairness opinions.

Sentieo users save time locating fairness opinions in seconds. Sentieo can also locate fairness opinions for companies that no longer trade. Here we show two examples: the pending deal between ConAgra Brands and Pinnacle Foods, and the acquisition of LinkedIn by Microsoft from a few years ago.

Pending deal between ConAgra Brands and Pinnacle Foods:

Acquisition of LinkedIn by Microsoft:

 

 

 

Memphis Research Finds A Financial Research Platform It Can Trust

About The Customer:

Memphis Research in Memphis, TN

Using Sentieo Since 2016

Memphis Research offers investment research, portfolio management, and consulting services for the hedge fund industry. Chad Gilliland (President) and Will Frazier (VP/Director) started the firm together in 2011 after working together at a hedge fund for some time.

 

The Challenge

Before Sentieo, the Memphis Research team had tried many financial research platforms, including Capital IQ and Bloomberg. All had fallen short of their expectations in a number of ways. They had un-intuitive user interfaces, limited mobile access, and were overpriced — to name a few shortcomings.

 

The Solution and Results

The team came across Sentieo and started a free trial. They immediately saw their fundamental research process improve:

“We feel like the Sentieo team understands what we do better than other platforms do. You are analysts and you think the way that we do. You know how to design the interface, and what you put into the product is not just random. You’ve included the pertinent details that an investment analyst wants to see. It makes a huge difference that the platform is truly built for analysts, by analysts.”

 

Document Search, Redlining, Watchlist Alerts, and News Stream

The Memphis team likes to run very specific keyword searches using Sentieo’s Document Search. They are able to narrow their searches down by document type, down to the document section (ie. “Risk Factors”). One popular use case for them is searching for disingenuous language and other signifiers within call transcripts.

The team also uses the Document Search redlining tool, which allows them to hone in on new document language or accounting numbers that have changed across quarters or over years.

Will and Chad also “follow” tickers in Sentieo by creating Watchlists of the companies they want to track. This allows them to receive immediate updates to their email inbox whenever new filings or financial statements come out for those companies. This is especially helpful to them during earnings season, when time is of the essence.

The team also keeps up with companies using the Sentieo News Stream, which is a feed of the latest social media tweets and articles about the companies they track.

 

 

 

An Equity Data Terminal They Can Trust

Will spends most of his time in the Sentieo Equity Data Terminal. He really loves the EDT’s company summary page, which lists a company’s consensus estimates, valuation and price target, major holders, and much more:

“In the EDT, I can quickly understand the nuts and bolts of a company. I have more confidence doing my research in Sentieo because I trust the data more than I trust the numbers in other systems.”

Will also extracts tables from documents into Excel, and compares them over time using Sentieo’s TableX suite of tools.

 

Staying Organized With The Notebook

Chad uses the Notebook (Sentieo’s research management system) to store his own notes and annotations by ticker, and to search through them as needed.

 

Mobile App For Access Anywhere, Anytime

Chad and Will frequently travel to trade shows, and they use the Sentieo mobile and tablet apps to keep working on-the-go. With Sentieo, they are able to quickly pull up financials and estimates at their fingertips, instead of printing and taking physical 10Ks and 10Qs with them. When listening to management calls, they are able to quickly pull up the expectations for a ticker on their mobile, and compare them to what’s being discussed on the spot. Chad also heavily uses the Sentieo app for the iPad tablet.

 

Conclusion

Will and Chad explained that Sentieo has revolutionized their fundamental research flow and saved them all the time and frustration they felt when using previous tools:

“We definitely positively endorse Sentieo. It’s an intuitive platform for built for the fundamental equity analyst, and helps us filter out the noise and get down to the fundamentals.”

How to Use Web Search Trends In Your Fundamental Research Workflow #2: Using Screener to Find Interesting Trends

Previous post in this series: How to Use Web Search Trends In Your Fundamental Research Workflow: Beat or Miss?

In our last blog post in this series, we talked about predicting a beat or miss with search trends. But there are situations where the data may not work as easily as with that example. So how can you sift through all of the data to find those situations?

Sentieo’s Screener lets you filter from thousands of stocks down to more manageable lists of names to do further work on. The steps below will use the Sentieo Index, a weighted average of alternative datasets that varies by ticker.

First, let’s rank on companies using a Sentieo Index r-squared of over 0.3. This will help find companies whose search trends correlate closely with revenues. We get down to 405 results:

Now perhaps we want to see where these companies are diverging vs. consensus expectations.

Let’s try using our acceleration ranks. This is just a number from 0 to 100, where (>50) means that the data had a positive acceleration, while (<50) means a negative acceleration (or a deceleration). We can simply look for cases where the Sentieo Index is accelerating, with Revenue growth expected to decelerate.

47 stocks is still a lot to go through. You can narrow down further by filter on a sector or even a specific watchlist. We’ve put in our “Cloud” watchlist to cover pure SaaS companies and are getting the following results:

It’s important to sanity-check these numbers by going into the charting interface. If we look closer for $ZEN, we can see that the Sentieo Index suggests an acceleration, while consensus expects a revenue growth deceleration.

View Interactive Chart

Screening is important when harnessing the power of alternative data. It is impossible to manually sift through data trends for each of the thousands of companies that we cover. Screener will help focus your efforts to a manageable list, so that you’re finding the best opportunities and prioritizing your time accordingly.

 

Top 17 Value Investing Blogs You Should Be Reading

In the constant race against the clock, you shouldn’t waste time reading mediocre content. We put together this list of must-read blogs based on feedback from our team of former analysts and additional in-depth research.

1. ValueWalk

Started in 2010, ValueWalk.com offers breaking financial industry news — with a focus on hedge funds, large asset managers, and value investing. The site provides quality content that is important to value investors (most of which is free).

It is read by senior level executives at the largest banks, hedge funds, asset managers, and Fortune 500 companies.

2. The Reformed Broker

This blog was started in November 2008 by the New York City-based financial advisor and CEO of Ritholtz Wealth Management, Joshua M. Brown.

The blog covers markets, politics, economics, media, culture and finance. Brown uses “statistics, satire, anecdotes, pop culture references, sarcasm, fact, fantasy and any other device” to communicate his market-related insights.

Brown has been featured in or has written for Fortune, Forbes, the Wall Street Journal, MarketWatch, Dow Jones Newswires, Bloomberg, Reuters, and more. He is also an on-air contributor to CNBC.

3. SumZero

This site describes itself as “the world’s largest community exclusively for professional investors, providing quality, peer-reviewed investment research from top analysts and rising stars in the fund industry.” Members describe this site as network-enriching and career-enhancing.

4. Base Hit Investing

John Huber is the portfolio manager of Saber Capital Management, LLC, a value-focused investment firm. Saber’s objective is to compound capital over the long-term by making investments in undervalued stocks of high-quality businesses. A few of his article topics include:

    1. Case Studies
    2. Education
    3. How to Improve Results
    4. Industry-Banks
    5. Industry-Insurance
    6. Industry-Oil
    7. Industry-Railroads
    8. Investment Ideas & Company Research

5. Zero Hedge

The mission statement of ZeroHedge on their website gives a good sense of their content:

    1. to widen the scope of financial, economic and political information available to the professional investing public.
    2. to skeptically examine and, where necessary, attack the flaccid institution that financial journalism has become.
    3. to liberate oppressed knowledge.
    4. to provide analysis uninhibited by political constraint.

Readers can subscribe to their newsletter for daily alerts and a weekly digest of articles.

6. Contrarian Edge

Vitaliy Katsenelson, author of this blog and a couple books, is a former analyst, portfolio manager, and now CEO of Investment Management Associates. His blog posts cover everything from behavioral investing, to capitalism, to cryptocurrency and specific tickers.

7. The Brooklyn Investor

The Brooklyn Investor is somewhat mysterious, in that he doesn’t reveal his real name on his blog. However, he explains that most of his career has been on Wall Street, starting in investment strategy/portfolio management, trading, futures/options and OTC derivatives structuring and trading, proprietary trading, special situations, and systems trading of futures at “one of the big hedge funds.”

He has always been a fan of Warren Buffett and other long term investors, and “it is reasonable to assume that [he is] long stocks that he thinks] are interesting and short the ones that I don’t like etc.” His blog covers everything from AAPL and GOOG to the gold standard.

8. Memos from Howard Marks

Oaktree Capital Management is a global alternative investment management firm with expertise in credit strategies. A section of their website is devoted to insights specifically from their internal team about investment strategies and investment philosophy. Howard Marks (CFA and Co-Chairman of Oaktree) covers topics from index investing to macro-fragility, to algorithmic investing.

9. Berkshire Hathaway Reports

Quarterly and annual reports – also easily accessible within Sentieo Document Search!

10. The Manual of Ideas

Through invitation-only events and member publications, MOI Global fosters a community of intelligent investors united by a passion for lifelong learning. The Manual of Ideas started out nearly a decade ago, focused on content. As the founders went out to gather and generate uniquely differentiated content for value-oriented investors, they came to appreciate the tight-knit value investing community that had been developing for many years thanks to a strong network formed by the Berkshire Hathaway annual meeting.

11. KASE Learning

Whitney Tilson is one of the most public longstanding value investors. Rooted in sharing their half century of experience as value investors and fund managers, Tilson and his long-time partner, Glenn Tongue have produced a multitude of resources on this site.

12. Value Investor Insight

Whitney Tilson also co-founded this monthly newsletter in 2004, in which he and editor in chief John Heins interview two portfolio managers about current topics.

13. Value Investors Club

Value Investors Club is “an exclusive online investment club where top investors share their best ideas.” VIC prides itself in the fact that its members are admitted only because of the strength of their investment ideas, and not their job titles. This selection process adds a number of diverse perspectives the forum.

14. csinvesting

The author of csinvesting has an interesting background: “In my peripatetic life I have been a ruby smuggler, commodity trader, securities analyst, investment banker, and entrepreneur. Each role taught me more about value investing.” His philosophy is for investors to learn from the successes and failures of others, so his blog covers mostly case studies.

15. Value Investing World

Value Investing World is a blog self-described as “dedicated to promoting the multidisciplinary approach to investing and development of – as Charlie Munger describes it – a latticework of mental models…and largely focused on linking to investing and economic material it deems of interest.”

16. Investor Junkie

Articles for everyone from beginner to advanced investors. Topics include everything from “socially responsible investing” to  “investing as an expat.”

17. A Wealth of Common Sense

A Wealth of Common Sense focuses on wealth management, investments, financial markets and investor psychology. Author Ben Carlson, CFA, manages portfolios for institutions and individuals at Ritholtz Wealth Management LLC. Ben has written a few books and has a weekly podcast called “Animal Spirits” which covers financial markets, personal finance, movies and dad life.

 

 

What’s For Brunch? Trending Foods with Growth Potential: Part 2

Last week, we took a close look at the food industry, which certainly follows trends and changing consumption habits that can ultimately greatly affect the performance of various companies. Using Sentieo, we were able to take a look at data and trends regarding protein-rich grains like quinoa, hemp, and sorghum. This week, we’ll examine how the hype around brunch and street foods have been discussed across company filings.

 

The Avocado Craze and Brunch Boom

Avocados have been available to consumers for a while, but they were not very popular outside of Mexican cuisine until a few years ago. Since 2010, the popularity of this fruit has boomed, and consumer interest has spiked due to people’s greater awareness of healthy eating habits. The benefits of the avocado are many: the fruit has more potassium than bananas and is full of antioxidants, to name a few.

Google Trends data from Sentieo shows the booming popularity of the avocado quite clearly. The volume of searches has risen by over 400% since 2004 – 2008:

 

Many companies are not waiting on the sidelines. They are well aware of the recent trends, and the number of times that the word “avocado” has been mentioned in company filings proves it. (See below).

There are numerous companies exposed to the growing popularity of the avocado. Del Monte produces and markets several avocado products, while Limoneira claims to be one of the leading producers of avocado in the Americas. In the restaurant segments, more and more companies use it as an ingredient in their recipes. Del Taco Restaurants even mentions avocado in the company’s About section on every press release:

Consumers’ changing tastes are not just reflected in the growing or falling popularity of specific foods, but also in changing consumption habits when it comes to where to eat and when to eat. The way people eat and relax across the world is evolving, and the growing popularity of brunch is a clear example of that.

Document hits confirm that the brunch boom is a trend that many companies have been riding for several years now:

Based on the number of times that the word “brunch” has been mentioned in filings and transcripts, the most active companies in the brunch space seem to be Brazilian steakhouse chain Fogo de Chao, The Cheesecake Factory, and Brinker International. Even hospitality chain Marriott International has tried to take advantage of the new trend by offering several brunch options to its customers.

Speaking of how and where, we can’t avoid mentioning the constant growth of street food concepts. Street food’s growth is rampant. Even Michelin has recognized street food in its Hong Kong guide, and even two Singapore street-food hawkers have each received one Michelin star. The street food concept is loved by companies that want low-risk ways to test a new restaurant concept or food offering before committing to larger investments.

Look at how the number of mentions of “street food” in company-related documents and transcripts has boomed since 2013:

It is also a reflection of the growing interest from customers:

Street food combines the pleasure of eating tasty food with an important experience component, and it’s highly shareable, as the growing number of Twitter mentions indicates:

 

Sentieo’s tools help us identify, analyze and compare industry trends quickly and effectively. We used Document Search and alternative data from Mosaic to analyze these interesting trends in the food industry, a segment of the consumer space that is experiencing significant changes due to increasing health consciousness, changing consumption habits, and the rising adoption of specific diets for ethical reasons.

However, Sentieo’s tools can be used to run ad-hoc searches on a virtually unlimited number of topics, allowing us to gain important insights into any industry that are not available anywhere else. Stay tuned for the upcoming Part 3 of our Trending Foods Series!

From Crypto to Interest Rates: A Sentiment Analysis of Q1 2018 Earnings Calls

Today we published our quarterly Sentiment Analysis Report, which summarizes last quarter’s top keyword searches and provides detailed sentiment analysis across all industries. We used Sentieo’s Transcript Sentiment Analysis feature to analyze earnings call transcripts and discover which topics companies discussed the most last quarter, versus the same quarter in 2017.

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 publish 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:

 

Sentiment Analysis

Management versus investor sentiment is diverging.

Our sentiment analysis on transcripts shows that a decoupling is taking hold between the language from company management and market participants. Management continues to be upbeat during earning calls and presentations, while sell-side analysts and investors are taking a more cautious stance. To learn more, download the full, free report.

 

Keyword Mentions

Two themes we look at closely in this report are Cryptocurrency and Trade Tariffs. When analyzing the number of mentions of crypto by company, the companies that are leading the conversation are currently Nvidia (crypto chip vendor), Visa (payment company), CBOE (professional crypto derivatives exchange), and Salesforce (CRM and enterprise SaaS vendor). 

Talks of trade wars have unsurprisingly become central to many companies, with a marked edge towards uncertainty, caution and even fear for the effect it will have on business. Read more on page 4 of the report.

With these quarterly reports, we are starting down the path of quantifying linguistic data. This report is a real use case of the exciting new features we recently released, like our Transcript Sentiment Report function, which is part of Sentieo Document Search.

Below is a sneak peek of the report: a sample page about cryptocurrency.

To learn more about the companies, industries, and regions where crypto and other themes are being most discussed, download the full report, which covers this sector and many more. To find out more about how to run your own sentiment analysis with Sentieo, sign up here for a free trial.