Bears Be Warned, Pandora $P Quite Literally Bought The Quarter

We are huge fans of Tim Westergren, who wrote the textbook on scrappy startups having founded and led Pandora through the tech implosion of the early 2000s. Doing everything to keep Pandora alive, from convincing employees to defer salaries, to maxing out personal credit cards, Tim’s vision of a Music Genome Project (US Patent 7,003,515) ultimately proved immensely valuable. But that was a decade ago.

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Since then, huge competitors from adjacencies like Apple ($AAPL) and Youtube ($GOOGL), well funded entrants like Amazon ($AMZN), to startups like Spotify and Tidal, have waded into the space with new technology. Spotify today was the subject of fresh discussions around an $8bn IPO while Pandora languishes at a $3bn market cap. A combination of 1) a subscription-based business model, 2) on-demand listening and 3) curated discovery has proven extremely successful and has presented a serious threat to Pandora’s lean-back, low ad load, passive listening model.

Tim has returned to rescue Pandora once again. Pandora’s pivot is 6 years too late, but late is better than never, and they are now pulling out all the stops. In this post, we show:

  • How the Street has gotten Pandora’s modeling so very wrong – and is still doing it!
  • How Pandora is ex growth in users and in technology
  • How to track Pandora on operator metrics using our Mosaic product and ask the right questions
  • How to import custom data sets into our Plotter and answer those questions

Put your favorite playlist on, and let’s begin!

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Why Netflix ($NFLX) Will Never Raise Prices Again

On Friday we wrote a blog post predicting a deterioration in $NFLX’s domestic and international businesses after analyzing web & social data available through Sentieo’s Mosaic offering. Yesterday $NFLX did indeed miss top and bottom line numbers and lowered guidance on quarterly net additions for both domestic and international segments, with management, largely blaming ”un-grandfathering” of lower prices. Management even used Google Trends to illustrate increased awareness of Netflix price increases un-grandfathering in their presentation and blamed increased media coverage for deterring new members.

 

We used Sentieo to take a closer look and found a profound result- Netflix has had three previous mentions of price increases un-grandfathering and each mention has consistently led to large decelerations in consumer interest and revenue growth. Put another way, yesterday’s miss and messaging is hardly a new phenomenon and suggests this is a structural headwind, meaning Netflix has much less pricing power than bulls (and management) have hoped for.

 

In the chart below we track social mentions of “Netflix price increase” via both Google Trends (green) and Twitter (black) as well as YoY growth in Google Trends searches for Netflix (dark blue dashed line).

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Notice the red boxes here indicate social mentions of price increases and in each case we see immediate deceleration in Google Trends growth. With “un-grandfathering” only half-way through, $NFLX will continue to face a significant membership growth headwind over several quarters, as traffic continues to be impacted by perceived price increases. This could be an even longer-term concern if, in the face of rising competition and content costs, $NFLX’s ability to raise prices is impeded.
Sentieo’s Mosaic service can be used to analyze real-time trends in a number of consumer, Tech/TMT, and healthcare companies. Using Mosaic, you can keep a real-time pulse on consumer interest for the stocks you follow, yielding better decision-making and better returns. Simply go to Sentieo.com and sign up for a free trial. If you would like to continually receive content related to topics of interest in the markets, don’t forget to subscribe to the Sentieo Blog so that we can notify you of new posts by e-mail. 

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A list of potentially cheap stocks buying back their shares

Sentieo’s Excel plug-in (a beta version is available to subscribers) can be used as a powerful screening tool to identify companies that buy back their own shares.  One danger with screening for buybacks is that many companies destroy shareholder value with buybacks: management buys back shares at high prices and fails to buy back shares at low prices.  Fortunately, we can weed out many of these companies by looking for companies that reduced their share count from 2008-2010 (since market valuations bottomed in early 2009).  Such companies bought back cheap shares in the past so they might be doing it again.

We’ve compiled a list of 76 stocks that meet the following criteria:

  1. The company reduced its share count year-over-year by at least 2%.
  2. The company reduced its share count from 2008-2010 by at least 5%.
  3. Market capitalization is above $300M.

This universe of stocks should be a great place to look for undervalued companies buying back their shares.  4 of them are owned by Berkshire Hathaway.

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Oil & Gas Research the Smart Way with Sentieo $NFX $FANG $CLR $APC

The O&G industry reports tons of data in both volume and detail—from drilling rig and pressure pumping data to well production info. Looking for and analyzing all of this information for your investment ideas is a very necessary but time consuming process. Designed by buysiders for buysiders, Sentieo is the best tool on the market for leveraging technology to rapidly compress your research cycle and give you more time to generate true alpha insights.

In this post, I’m going to show you a glimpse into the world of oil & gas research using Sentieo—so that you can spend more time analyzing your the findings and try to come up with answers to questions such as:

Which E&P companies might be at risk of defaulting on their loan obligations?

Has an E&P operator you are following announced those new well results yet?

What would this company specific data would look if I plotted it against other metrics?

What are some ways I can use Sentieo to research industry trends?

What are companies are saying about break-even oil prices and well-economics?

How many drilled but uncompleted wells are in a company’s backlog?

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Latest Trends in Cord Cutting

Consumers are dropping their cable TV subscriptions at higher rates as they spend more time online and switch to smaller packages like Netflix, Amazon and Hulu.  In this quick post, we will show you how to use Sentieo to analyze this trend and see who is most exposed.

Doing a basic search on “cord cutting” in our Document Search the first key takeaway is how much more companies are mentioning “cord cutting” in their filings and transcripts.  You can see below with the red bar chart, how the number of mentions has grown over the last year.

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Looking Forward To Friday? Avoid these Serial Friday Reporters that underperform over 40%

Looking over a relatively benign humpday, we wanted to take a look at companies who frequently file 8k’s after market close on a Friday. Using Sentieo’s powerful search engine, we were able to rapidly cull this data. Then pairing this with returns data from our Excel plugin, we backtested the extent to which consistent late-Friday reporters underperform the market. Trader’s intuition tells us that these aftermarket shenanigans are never good news, but does it hold up to the facts?

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$TWLO: Diligencing IPOs on Sentieo

Twilio filed their highly anticipated S1 yesterday, which was available to search, annotate and analyze instantly on Sentieo. Our analyst was able to build a quick 3 statement model in under 15 minutes, available below.
– WhatsApp is 15% of revenue, but the breadth of customers disclosed has surprised commentators, including Nordstrom $JWN. We show how this has been known for over a year, and how a broader ecosystem list could have been generated months ago using Sentieo, yielding interesting clients like Salesforce $CRM, partners like 8×8 $EGHT, landlords like Boston Properties $BXP and listed, lesser known competitors like GINSMS $GOK:CN and Xura $MESG.
– Many research processes, from pulling out $TWLO financials to building a notebook from web clips of external articles can be done in a single click. 
– Twilio’s wide competition can be tracked and aggregated, and show a surprising trend in recent months that will be worth investigating.

Rather than discussing the IPO dynamics which will certainly be difficult in this tech-unfriendly IPO environment, we wanted to spend some time walking users through how they can even diligence non-public companies using Sentieo. In particular, we will highlight three of our products: DocSearch, Web Clipper, and Mosaic.

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Fintech Innovator Sentieo Launches Game-Changing Data Search Technology

To sign up for a free trial- click here.

SAN FRANCISCO and NEW YORK, May 11, 2016 /PRNewswire/ — Today two brothers, Alap and Naman Shah, unveiled Sentieo, a powerful equity research platform that arms financial analysts with new ways to quickly search, visualize, and interpret data allowing them to do deeper, faster research, spot business inflections earlier, and generate better returns.

Sentieo has been quietly building momentum for over three years leading up to today’s official launch, offering a lightning fast, thoughtfully designed web and app based interface developed by Sentieo’s team of 40 engineers, which is already speeding up the workflow of more than 60 clients. Sentieo’s clients include two of the top ten hedge funds, as well as numerous top mutual funds, investment banks, financial advisors, research houses, and corporate development departments.

Sentieo is first and foremost a search engine, focusing its natural language processing (NLP) and deep semantic search technology on an exhaustive database of global financial documents. Users can instantly search SEC filings, transcripts, broker research, and news to find key text and data. Users may then pull data using Sentieo’s table extraction technology and highlight and annotate key text and figures on the fly. All work performed on the platform pushes into the user’s cloud-based Sentieo Notebook that serves as a light-touch Research Management System (RMS) for organizing and collaborating on research content. Additional content can be pulled in via email and Sentieo’s browser extension webclipper, becoming instantly available in the user’s Sentieo Notebook that is accessible from a user’s desktop, iPad and iPhone apps, and via Sentieo’s Excel Plugin.

“The magic of Sentieo is that it understands and caters to an analyst’s workflow, allowing you to centralize activities previously performed in Excel, Evernote/OneNote, chat, document search, and your financial terminal, all in a single, seamless platform,” said Sentieo CEO Alap Shah.

While working as a hedge fund analyst covering consumer equities at Viking Global Investors and in Citadel’s Global Equities business, CEO Alap Shah realized that existing financial data platforms were unable to keep up with his need to process information about hundreds of companies and positions every day. The seed of Sentieo was planted, resulting in a platform built from the user’s point of view, automating key processes and ensuring timely alerts on key textual and contextual changes in documents and data. Sentieo’s key services have been architected with a user first philosophy by a world-class team of Product Managers with previous Analyst and Portfolio Manager experience at top buy-side shops including Balyasny Asset Management, Pine River Capital Management, Scout Capital, Casablanca Capital, and Citigroup’s prop trading desk, as well as investment banking experience from JPMorgan, Lazard, and Standard Chartered Bank.

Employing the latest in machine learning and predictive analysis, Sentieo’s new Mosaic service stands at the forefront of the growing “Quantamental” investing trend, arming fundamental investors with quant tools to help forecast demand and price movements. By tracking, scrubbing, and visualizing key company/brand data such as website traffic, search volumes, Twitter mentions, app downloads and more, Mosaic allows analysts to correlate web interest to revenue growth and price performance, driving a significant alpha generation edge. Freeing analysts from tedious work in Excel and removing the need for in-house engineers, Mosaic allows funds to track and maximize the benefit from all the valuable datasets they acquire or create.

Sentieo further alters the fintech landscape with a range of unique features, including:

A desktop built for the web and cloud, architected using the most recent web frameworks with no software to download or maintain;
Mobile applications (iPad, iPhone and Android) designed simultaneously with the core desktop platform to offer a full range of services with seamless transitioning and sync across devices;
World class collaboration technology using the Sentieo Notebook, as well as collaboration centralization, reporting and audit for CTOs and compliance officers.
“Sentieo works the way a modern financial platform should. It not only generates better search results faster, it incorporates a broader and more complex combination of financial and real-world datasets to produce a more revealing picture of what’s actually happening in the real world,” said Alap Shah.

To create Sentieo, Alap partnered with his brother, Naman Shah, Sentieo’s president. Previously, Naman developed breakthroughs in low-cost reverse osmosis filtration technology, water delivery networks, and cloud technology as co-founder of Sarvajal, a social enterprise that provides clean drinking water to over 300,000 underserved villagers in India. Together Naman and CTO Rajdeep Singh have built a world-class team of engineers and designers that drive the rapid pace of Sentieo’s product innovation.

“We wanted to take a new approach to a field that isn’t innovating fast enough, and discard all assumptions,” said Naman Shah. “It’s not only about what users want, it’s also about what they don’t yet know they want. By combining institutional quality financial data with the most advanced analytical technology, we built something that is more useful than existing tools and effortlessly intuitive.”

For more information on Sentieo, visit https://www.sentieo.com/.

About Sentieo
Sentieo is a revolutionary equity research platform designed by hedge fund analysts determined to put the user first. Combining traditional and innovative datasets, it increases efficiency and boosts alpha generation for asset managers, investment banks, and corporations. Serving a global customer base, Sentieo has a team of 60 with offices in San Francisco, New York, Florida, and New Delhi, India.

To sign up for a free trial- click here.

Reposted from: http://www.prnewswire.com/news-releases/fintech-innovator-sentieo-launches-game-changing-data-search-technology-300266904.html

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$WFM Whole Foods Spoiled: Software Eating Food Edition

Interested in trying out Sentieo? Click here to request a free trial.

– Subscription meal-kit services like Blue Apron, HelloFresh ($RKET), Plated and dozens of other upstarts are changing the way people purchase groceries and are permanently impairing WFM’s traffic. We walk through how we used Sentieo to ballpark the -1.0% to -1.5% annual comp sales headwind from lost traffic.

– In the broader “food at home” space, WFM’s prepared food business is also at risk from the likes of health-focused on-demand players like Sprig and Munchery as well as new on-demand restaurant delivery players like Postmates, Doordash, and Caviar. Prepared food is 20% of WFM revenue at margins significantly higher than company average.

– The disruption by new tech-enabled players and direct competition by lower margin traditional grocers means WFM has to reset margins, potentially much lower.

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