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Using AI to Analyze Key Themes This Earnings Season: Vaccine Comments Across Industries

With the great news from Pfizer and BioNTech regarding their COVID vaccine development on Monday, November 9, 2020, we observed major rotations in the equity markets. For example, several of the “Work From Home” names that we wrote about in February, well ahead of the March sell-off, were down double-digits on the news, including Zoom, Teladoc, and Peloton. 

On the other hand, we saw a major rebound in airlines: the JETS ETF was up 16%. We covered the very low sentiment across the industry’s transcripts using our NLP Sentiment Heatmaps in July 2020 (Airlines: Stuck at the Gate). 

Related to the reduction in “COVID risk”, in August the New York Times Dealbook featured our proprietary “COVID risk indicator”, the stock price ratio of Clorox to Dave and Buster’s: the indicator continues to work, as Dave and Buster’s finished the day up 33% while Clorox was down 11%. The ratio is now at around its March 9th, 2020 level. 

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Given the importance of the vaccine news, the first thing that we looked at was the trend in transcripts with mentions of the terms vaccine or vaccines. We can clearly see the spike this year from a very low base (mostly healthcare companies discuss the topic pre-2020, and hopefully we return to this state soon). 

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In our popular click-through Search Analytics page, we can see that Healthcare is the top industry that mentions vaccines over the last 2 years, Industrials is 2nd.

Clicking on Industrials to filer, we can see a more detailed breakdown of the sub-sectors.

Continuing our research on vaccine comments across industries, we utilized many of Sentieo’s standard AI (NLP and ML) tools that help users save time and gain insights every day:

In our Q3 2020 coverage, we previously looked at the big banks and at the Office/Diversified REITs/ state of the return to the office.  

SEC Filings Section Redlining 

We saw added vaccine language across filers when we applied our new Section Redlining Heatmaps: we use this type of linguistic intelligence to look for quantitative factors that can influence stock price performance in a return to a (new) normal.  

In the example below, we can see that AvalonBay, a high-density urban residential REIT, added language specifically about vaccines in their latest Risk Factors: the company does not expect pre-pandemic NOI (Net Operating Income) levels before a widely available vaccine. 

We saw added language around vaccines and treatments in Marriott’s latest 10-Q among the most important factors influencing the company. 

Restaurant franchisor YUM! Brands (parent of KFC, Taco Bell, Pizza Hut, and The Habit) also added vaccine timeline to its Risk Factors. 

Transcript NLP Heatmaps

We saw the vaccine news picked up as a topic in our NLP Heatmaps. For example, mall landlord (and, now, owner of several retail chains) Simon Property Group has seen the overall sentiment improve QoQ, and welcomed the vaccine news while cautioning on the ongoing spike in cases.

Trending Terms

We see Vaccine as the top trending term for Norwegian Cruise Lines, as the call happened after the Pfizer news: RCL and CCL, comps that reported earlier, did not have the term. Easily comparing the trending terms among direct competitors can alert users to changes in industry conditions. 

Transcript NLP Smart Summary Word Clouds

Using the word clouds, we can get a more visual extended version of the trending terms. We can see Vaccine really dominating the word cloud for Norweigian Cruise Line Holdings’ latest transcript. 

We also see Vaccine emerging in the word clouds for Deutsche Post and aircraft finance company Aercap NV. 

Table Explorer: one-click table identification, chaining and visualization

Finally, we used our machine learning-based table identification, chaining, extraction and visualization tool Table Explorer: the rapid visualization of any line item (including amounts, change, and common size) is an indispensable tool for analysis. 

We spotted added vaccine language in JetBlue’s latest 10-Q using our “classic” redlining.

To assess the potential impact, below we have chained the main KPI table in JetBlue’s latest 8-K filing. In the first image, we are displaying the Revenue Passenger Miles and the Available Seat Miles. In the second chart, we have converted the metrics to YoY% change, and we are visualizing the passenger count drop-off in the integrated mini-plotter. 

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