This month’s release focuses on enhancing integrated features and user experiences as well as improved transparency/accessibility for content on the platform.

New Calendar Functionality

Improving the Sentieo Calendar experience takes a step forward this month to create a more integrated user experience. We’re rolling out several Calendar feature enhancements, including the ability to sync your Google or Outlook calendar events in Sentieo.

Addition of Industry Filter Capabilities for Sector Searches

One of the benefits Sentieo offers users is a multitude of ways to create more targeted search results. To that end, we’ve added an Industry filter layer (GICS Level 3) to our Sector filters to provide greater flexibility for users who view coverage areas through that lens.

If you are a current Sentieo user, log into Sentieo to read the August 2022 release notes. If you’d like to learn more about the Sentieo Platform, contact us today to meet with a solution executive.

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Throughout 2022, we’ve been working to expand our fixed-income research sources. This month’s release continues that journey with exciting news about a new content partner on the platform.

Expanding Credit Research with S&P

We are thrilled to enter into a new partnership with S&P Credit Research. We are now able to provide their leading Credit Markets research reports to our mutual user base. Coverage areas include credit, regional and sector insights, and macroeconomic themes.  

If you are a current Sentieo user and want to learn more about our new partnership with S&P or additional new features launching in July, log into Sentieo to read the July 2022 release notes. To learn more about the Sentieo Platform, contact us today to meet with a solution executive.

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I am thrilled to announce that Sentieo has been acquired by AlphaSense, the leading market intelligence and search platform that shares our closely-aligned mission to empower investors and corporations with the intelligence they need to make better decisions more quickly and confidently.

Since our founding ten years ago, the Sentieo team has built an award-winning financial intelligence platform that enables analysts to find information quickly across millions of documents and datasets. Our platform and workflow capabilities offer fund managers multiple ways to bring their own content into the platform and more easily share findings, collaborate, and streamline even the most data-intensive work. We are proud of our stellar team and the research innovations that today serve over 1,000 customers, including 800 institutional investment firms.

Combining forces through this acquisition will enable us to build an even bigger and better world-class organization. Our founders, leadership team, and employees could not be more excited about the opportunity to join forces and collaborate with a highly capitalized, high-growth partner like AlphaSense.

Sentieo will continue to operate as a standalone company, with ongoing investment in the Sentieo platform. The entire Sentieo team will stay on board to help grow the product, technologies, and team. There will be no interruption to service and customer success contacts and support channels will remain the same.

This new partnership will bring powerful complementary benefits to the customers and markets we collectively serve. By combining Sentieo’s rich workflow capabilities, like our Table Explorer functionality, with AlphaSense’s exclusive content sets, like the market-leading library of expert call transcripts Stream, a prior acquisition by AlphaSense, we will aim to offer “best of breed” capabilities across both products to ensure we’re delivering the best value and experience for our users.

Both Sentieo and AlphaSense share a passion for accelerating time to insight and streamlining research workflows, and we couldn’t be more excited for what the future holds.

David Lichtblau, CEO, Sentieo

Announcement

AlphaSense Acquires Sentieo in its Continued Push to Accelerate Growth and Innovation in Market Intelligence

AlphaSense and Sentieo are pleased to announce today that AlphaSense has completed its acquisition of Sentieo, the financial intelligence platform specifically designed for the research needs of investors. The combination marks two strong teams joining forces to deliver even more innovation to the market. Sentieo will operate under its current management as a wholly owned subsidiary of AlphaSense.

Since 2011, AlphaSense has been the leading innovator in market intelligence and search, with a rapidly expanding customer base of thousands of enterprise customers, including the majority of S&P 500 companies, most of the largest investment firms and global banks, all of the largest 20 pharmaceutical companies, and leading companies across wide-ranging industries such as energy, industrials, consumer goods, and technology. In October 2021, AlphaSense announced its acquisition of Stream, a leading expert transcript library, delivering unique insights from business operators in the trenches and today used by a rapidly growing portion of AlphaSense customers across all sectors.

Sentieo is an award-winning financial research engine designed for investors, used by over 1,000 customers, including 800 institutional investment firms. Leveraging innovative machine learning and natural language processing capabilities, Sentieo’s platform and workflow capabilities enable fund managers to more easily locate key information, share findings, collaborate, and streamline investment research workflows. Given Sentieo’s focus as a powerful financial intelligence platform designed for investors, the acquisition will result in AlphaSense further cementing its position as the leading innovator serving the financial sector.

“With our acquisition of Sentieo, we are excited to accelerate our shared mission to deliver market-leading technology and insights that enable knowledge professionals to make critical decisions with confidence and speed,” said Jack Kokko, co-founder and CEO of AlphaSense. “We have been impressed by what the Sentieo team has built and their strong technical capability, innovation, and customer focus. We are excited to join forces, and I am confident that this partnership will help us both significantly improve the value we provide to our customers and the innovation we deliver to the whole industry.”

Both companies’ customers will continue to receive the same products and services as before. Over time each will be augmented with additional functionality and content based on the companies’ collective capabilities. The acquisition allows AlphaSense to further accelerate product development based on the combined strengths of two of the industry’s most innovative development teams.

“Speaking on behalf of the entire Sentieo team, we are excited to be a part of AlphaSense. We have a shared mission, shared values, and a shared product-led mindset that will empower us to provide even more innovative solutions to the market together,” said David Lichtblau, CEO of Sentieo. 

“Jack and his team have built a world-class company that is pioneering the field of market intelligence,” continued Alap Shah, chairman and co-founder of Sentieo. “We are thrilled to continue to drive the industry forward with cutting-edge technology and workflow solutions as our two great companies join and grow together.”

The post Exciting News: Sentieo Joins The AlphaSense Family appeared first on Sentieo.

Communication Services Sector 

“We are well on track to our capital markets targets to take unit deployment costs down 25% on a like-for-like basis, inflation is not affecting us, we have long-term contracts.”

Timotheus Hottges, Deutsche Telekom AG – Chairman of Management Board, CEO & Member of the Data Privacy Advisory Board (February 2022)

“Nobody should like inflation at the levels we’re seeing in the United States right now. That approach or policy that ultimately doesn’t get that contained quickly is not going to be good for anybody, my company or any other company. And our focus right now as a country, our focus from a policy perspective, our focus on everything we should be doing is about getting that genie back in the bottle and dealing with in an aggressive way, it’s not healthy for anything.”

John T. Stankey, AT&T Inc. – CEO, President & Director (January 2022)

Industrials Sector 

“On the right-hand side, watch items have not changed since our last Capital Market Day: traffic recovery pace, obviously; recruitment and wage inflation; supply chain monitoring. And this is going to be, let’s say, the main watch items, I’d like to say: cost inflation; shortage of materials and components.”

Olivier Andries, Safran SA – CEO & Director (February 2022)

“Because when we talk about these inflationary pressures, we may have a supplier taking advantage of these capacity constraints to play the price card. We may just run out of access to a component.”

H. Lawrence Culp, General Electric Company – Chairman & CEO (February 2022)

“So we expect to be able to continue to leverage that pricing ability as we work through the inflationary challenges that we face in the new year.”

Michael F. Roman, 3M Company – Chairman & CEO (February 2022)

“And in a situation where inflation is popping up very quickly and to a very high number, that’s quite of a challenge”

Guillaume M.J.D Faury, Airbus SE – CEO & Executive Director (February 2022)

“And today, we believe we are able to secure trucks at a lower cost than the vast majority of the industry, both in an inflationary market on the right, and a deflationary market on the left.”

Lior Ron, Uber Freight LLC – CEO (February 2022)

“However, if we operate in a sustained higher inflation environment, it’s quite possible that the rate of that decline per unit will adjust to be a slightly less steep decline, which then is an effective relative price increase relative to the rate of decline we’ve had in the past..”

Erik Engstrom, RELX PLC – CEO & Executive Director (February 2022)

“As a leader, a technology leader, we are confident to balance cost inflation with pricing actions over time. All in all, this led to another excellent performance across all financial metrics.”

Roland Busch, Siemens Aktiengesellschaft – President, CEO & Member of Management Board (February 2022)

“I think it’s fair to say the single biggest pressure that the law firms face is that wage inflation.”

Stephen John Hasker, Thomson Reuters Corporation – President, CEO & Director (February 2022)

“The inflation that we’ve experienced in our Americas businesses and our U.S.-based businesses has been significantly higher than what we’ve seen in other markets around the world.”

Craig Arnold, Eaton Corporation plc – Chairman & CEO (February 2022)

“These swift pricing actions allow us to stay ahead of the inflation curve, driving a 5% increase year-over-year on top line and yielding approximately 50 basis points of margin expansions net of inflation.”

Darius E. Adamczyk, Honeywell International Inc. – Chairman of the Board & CEO (February 2022)

“Yes, it was a challenge in going into Q3 in North America and with the labor market, big volumes, component shortage and all that and also on the inflation of commodities and components and so on.”

Bjorn Klas Otto Rosengren, ABB Ltd – CEO (February 2022)

“As 2022 kicks off, we’re fully focused on recovering inflationary cost increases through our pricing programs and through the aggressive management of our cost structure.”

James C. Fish, Waste Management, Inc. – President, CEO & Director (February 2022)

“The external environment is challenging due to the ongoing impacts of the pandemic, labor tightness, upstream supply chain jams and rising inflation.”

Carol B. Tome, United Parcel Service, Inc. – CEO & Director (February 2022)

“As you know, we implemented price increases during 2021. We’re taking further action in 2022 with the intent to offset the impact of underlying inflation.”

D. James Umpleby, Caterpillar Inc. – Chairman of the Board & CEO (January 2022)

“While we expect to drive further efficiencies in 2022, our plan reflects the impact of increased inflation, any number of discrete strategic investment opportunities.”

James M. Foote, CSX Corporation – President, CEO & Director (January 2022)

Consumer Staples Sector 

“We continue to refresh our core portfolio. And while we’ve talked to you about this for several years, it becomes even more important during times of raw material inflation.”

Noel R. Wallace, Colgate-Palmolive Company – Chairman, CEO & President (February 2022)

“So we have inflation now across the board, but we’ve been dealing with inflation for many years in developing markets, and our revenue management toolkit is being very helpful over the years, but it’s almost like we are in a 2.0 version with data that we have in hand now.”

Michel Dimitrios Doukeris, Anheuser-Busch InBev SA/NV – CEO (February 2022)

“In addition, unprecedented levels of inflation across nearly all components of cost of goods and cost to serve necessitated multiple pricing actions across the industry, most of which lagged inflation in terms of timing in the market..”

Robert J. Gamgort, Keurig Dr Pepper Inc. – Executive Chairman, President & CEO (February 2022)

“So obviously, we’re dealing with a number of unknowns. Where exactly inflation is going? How much pricing we can get away with?”

Ulf Mark Schneider, Nestle S.A. – CEO, Member of Executive Board & Director (February 2022)

“We’re working closely with our suppliers to manage inflation, finding a few places where we can roll back prices, and we’re paying close attention to how we manage our opening price point items.”

C. Douglas McMillon, Walmart Inc. – President, CEO & Director (February 2022)

“And I think you have to recognize as well that the cost inflation pressures also hitting private label. So I think you’re going to see that too play itself out.”

Laxman Narasimhan, Reckitt Benckiser Group plc – Group CEO & Executive Director (February 2022)

“As we continue to take this quite assertive price increases, as we are saying in the context of very high generic consumer inflation, energy bills, the big question is, indeed, whether disposable incomes will be hit to the point that it will dampen overall consumer spend and beer spend as well.”

Rudolf Gijsbert Servaas van den Brink, Heineken N.V. – Chairman of the Executive Board & CEO (February 2022)

“Price elasticity is still strong in the U.S. There’s a lot of moving parts at the moment in terms of price of gas, employment and inflation and everything. I mean we’ll take it step by step.” 

Jack Marie Henry David Bowles, British American Tobacco p.l.c. – CEO, Member of Management Board & Director (February 2022)

“Further recovery in 2022 will be determined by macro factors, including overall consumer sentiment as well as supply chain challenges; labor shortages; and of course, the inflationary pressures and interest rates.”

James Robert B. Quincey, The Coca-Cola Company – Chairman & CEO (February 2022)

“2022 has started well. But the biggest challenge we’ll face this year is navigating a further step-up in input cost inflation… Pricing stepped up to its highest level in the decade as we responded to the significant inflation that we’re seeing across commodities and other input costs.”

Alan W. Jope, Unilever PLC – CEO & Executive Director (February 2022)

Health Care Sector 

“We have a formal inflation task force that we’ve established, with multiple different pillars within that and dedicated groups, working on everything from rethinking our logistics chain, and that includes looking at alternative shipping partners in a number of areas.”

Thomas E. Polen, Becton, Dickinson and Company – President, CEO & Chairman (February 2022)

“At this particular point in time, our book of business for 2022 is pretty much accomplished and part of ’23 is accomplished. But we’re building in some flexibility to reflect the inflationary pressures that might exist, and we’ll continue to work through those as we work through our contract portfolio with the different payers.”

Samuel N. Hazen, HCA Healthcare, Inc. – CEO & Director (January 2022)

“Another area, obviously, on the macro side is supply chains and inflation challenges that every company is facing, and obviously, kind of currency headwinds. So I’d say those are all challenges that are facing a lot of medtech companies, companies in health care, and quite frankly, a lot of companies outside of our sector.”

Robert B. Ford, Abbott Laboratories – Chairman of the Board, President & CEO (January 2022)

“We do see inflationary pressure on our own costs. Certainly, hospitals are going to be seeing it in their cost, labor costs and otherwise. And what that implies for us going forward, we’ll work to balance.”

Gary S. Guthart, Intuitive Surgical, Inc. – President, CEO & Director (January 2022)

Materials Sector 

“We had to absorb inflation and minimize the impact. We had, of course, to swallow EUR 2 billion increase in energy costs.”

Benoit Potier, L’Air Liquide S.A. – Chairman & CEO (February 2022)

“This was required to compensate for significant incremental costs from supply constraints and much high inflation pressure on our raw material and freight costs, discussed by close to 20% in the fourth quarter, nearly double the rate we saw in the third.”

Christophe Beck, Ecolab Inc. – President, CEO & Director (February 2022)

“However, I do have some concerns on the economic backdrop driven by continued COVID challenge, the impact of supply chain constraints, inflation, energy costs and geopolitical tensions.”

Seifollah Ghasemi, Air Products and Chemicals, Inc. – Chairman, President & CEO (February 2022)

“Even with the increase in consolidated sales, we were not able to fully overcome the impacts of raw material and other cost inflation, raw material availability and the Omicron variant in the year.”

John G. Morikis, The Sherwin-Williams Company – Chairman of the Board, President & CEO (January 2022)

Information Technology Sector 

“So I think, as Prashanth said, cost inflation, we’re in the post-Moore’s Law era, cost inflation, I think, is going to be a long-term facet of the economic dynamic of the semiconductor business. So I expect that cost increases will moderate, but there will be inflation, I think, for the medium to long term here.”

Vincent T. Roche, Analog Devices, Inc. – President, CEO & Director (February 2022)

“So I think that clearly, we have customers who are definitely trying to buy ahead of price increases.”

Charles H. Robbins, Cisco Systems, Inc. – Chairman & CEO (February 2022)

“So inflation is affecting our business in a different way than it would be the overall CPI. So if you have inflation expecting rent, while that’s generally not running through our rails to a large extent. So that could again be a very different picture. Taking all of that into account, fundamentally, notwithstanding the impact that inflation has that it could be negative on consumers, on businesses and so forth. There is an impact on GDV if it’s moderate inflation that would be showing in our numbers.”

Michael Miebach, Mastercard Incorporated – CEO, President & Director (January 2022)

“Further, we’d say, over time, we think we have a structurally superior margin model for our business where I think everybody is seeing acute inflation and foundry costs and others in the industry where our factory network will give us a lot more opportunities to create a more balanced cost structure that others in the industry will not be able to accomplish.”

Patrick P. Gelsinger, Intel Corporation – CEO & Director (January 2022)

Utilities Sector

“About half of our operating margin is automatically protected from inflation as a result of regulatory frameworks and contracts within the excess prices. And for the remainder, we expect market prices to reflect increase in cost. In addition, our major supply contract for 2022 are already closed with fixed or hedged prices protecting ourselves from any potential duration of price shock in the global supply chains.”

Jose Ignacio Sanchez Galan, Iberdrola, S.A. – Executive Chairman & CEO (February 2022)

“In terms of inflation, we are seeing labor inflation as the one thing I would point to.”

Lynn J. Good, Duke Energy Corporation – Chairman, President & CEO (February 2022)

Real Estate Sector 

“There are different types of price increases. We’re actually implementing some baseline, sort of new pricing for new deals because of a broader set of inflationary characteristics and a deep confidence in the value that we deliver to customers. Those I view as more structural. But then in other markets, there are more temporal pricing adjustments associated directly with the utility volatility. And I wouldn’t expect those to be permanent.”

Charles J. Meyers, Equinix, Inc. – President, CEO & Director (February 2022)

“The other thing is that I think if you’re uncertain about the inflation outlook, which is what a lot of the discussion is, is it inflation, is it supply chain, is it short term, is it long term, not a bad thing to own modestly leveraged real estate in an asset class that’s in the equilibrium, actually better than equilibrium, a couple of hundred basis points tighter than equilibrium, when you have replacement costs that give you that buffer. So we have the buffer of the mark-to-market in the 30% range that Tom talked about. But we also have the buffer of replacement costs going up, which Gene talked about. That’s just the future buffer that we haven’t started talking about yet.”

Hamid R. Moghadam, Prologis, Inc. – Co-Founder, Chairman & CEO (January 2022)

“We have escalators built into our contracts internationally. They’re largely driven tying to inflation. Our land, which is our biggest cost, has fixed escalators largely in the United States and again, kind of the same basis internationally. And our payer role is the next largest expense, which is somewhat controllable as well. So I don’t really look at the inflation as being — having a significant impact on our business.”

Thomas A. Bartlett, American Tower Corporation – President, CEO & Director (January 2022)

Energy Sector 

“We are confident EOG’s innovative and technology-driven culture can offset inflationary pressures this year.”

Ezra Y. Yacob, EOG Resources, Inc. – CEO & Director (February 2022)

“So what you’ve seen or what you hear from Joel is that we have very little exposure to inflation in terms of our operating costs.”

Francois Lionel Poirier, TC Energy Corporation – CEO, President & Director (February 2022)

“In procurement with developing long-term supply agreements, like we would have our long-term relationships, like we would have in the oil and gas business. So it’s one of the things that I think we’re working with them on to these frame agreements that we’ve traditionally used in oil and gas, to see if they can develop long-term relationships, Jason, there. So — and some of these megawatts that we’re flipping on at the moment look like they’re not being impacted by inflation prices. They seem to be very attractive.”

Bernard Looney, BP p.l.c. – CEO & Director (February 2022)

“Yes, we see some price inflation as well. Of course, most of the price inflation that is being talked about today is, of course, in cost of living and clearly driven also by energy prices. If you look into our supply chain, though, it’s a slightly different story. I think probably where we see most of the supply chain cost inflation is actually in the renewable space. So wind turbines, significantly up, but also battery costs, we see the raw materials there also being significantly affected by inflation and supply chain. That’s something that we are watching very carefully because, of course, quite often, you bid on projects where you have to take a view on how costs then subsequently will develop as well. And that’s probably the most significant part.”

Ben Van Beurden, Shell plc – CEO & Director (February 2022)

Financials Sector 

“But just to put it into context, it’s hard to predict how inflation will move forward over the next year or 2, but there’s likely to be inflation there.”

Noel P. Quinn, HSBC Holdings plc – Group CEO, Member of the Group Management Board & Executive Director (February 2022)

“And as you know, we have been very clear that we have believed that, particularly in Europe, interest rate policy and QE have been by far wrong because it was trying to drive certain effects that never materialized, higher investments and others. So now it’s really high time that we increase interest rates. We have minus 5% to 6% interest rates in Germany now, which is basically robbery of private people’s money and the forecast from the Central Bank will all wrong, right? So last year, they said there is no inflation, then the inflation would be very short, and then there was what now. People have come to recognize that it’s there… You can have very negative effects on spread widening that are unintended.”

Oliver Bate, Allianz SE – Chairman of the Management Board & CEO (February 2022)

“Rates. You’ve heard some of the rhetoric. We believe that rates will continue to trend above expected loss costs with an inflation buffer in there. We saw in the fourth quarter where there was concern and fear around Property, and Property turned back. And I call out not only to ourselves but to everybody on this call, how we thought there would be deceleration in 2021, but there was a respect in the industry and a reflection in the industry on inflation costs, and the market is reacting rationally to that. And we think that will continue into 2022.”

David Hughes McElroy, American International Group, Inc. – Executive VP & CEO of General Insurance (February 2022)

“We also think that scale matters everywhere in business. And there’s going to be continued consolidation, continued repositioning activity. And the environment that we’re shifting into, given we’re moving into an environment with probably above trend inflation for a period of time, actually is going to force companies to think about their strategic positioning differently, and we’ll benefit from that… Inflation has the risk of being a real headwind to growth.”

David Solomon, The Goldman Sachs Group, Inc. – Chairman & CEO (February 2022)

“The only incremental color I’d give is, if anything, we’re seeing more interest in real assets with yield. So anything with some inflation protection, so think infrastructure and real estate. As we see inflation expectations go up, we’re finding even more interest in those asset classes.”

Scott C. Nuttall, KKR & Co. Inc. – Co-CEO & Director (February 2022)

“What are the uncertainties? Obviously, on the one hand, it’s the policy era in the sense that you wind up with massive increases in interest rates, which take economies into recession. We’ve not factored that into our outlook. At this point in time, though we think it’s unlikely, even if there are 7 or 8 rate hikes, that would take rates up to about 2% levels, and 2% levels are still manageable. If the Central Banks find that inflation is too sticky, and therefore, rates get back to 3%, 3.5%, 4% level, then that’s another story.”

Piyush Gupta, DBS Group Holdings Ltd – CEO & Executive Director (February 2022)

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To that end, the latest addition to our toolset is the ESG Risk Score, available as a dashboard widget. The score is powered by Clarity AI, a leading sustainability data science and technology company.

The new ESG Risk Score widget for the Sentieo dashboard aims to add a new dimension to an investor’s portfolio analysis. It provides ESG risk scores for companies and delivers score breakdowns against the three ESG indicators (Environmental, Social, and Governance). 

This new tool offers an additional way for investors to make informed and socially efficient investments, gaining insights into the measurement and management of a company’s ESG risks and opportunities.

If you are a current Sentieo user, log into Sentieo to read the release notes. If you’d like to learn more about the Sentieo Platform, contact us today to meet with a solution executive.

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Institutional investors are incorporating ESG information into their investment processes more than ever to:

• mitigate risk
• comply with regulatory requirements
• meet client mandates
• fulfill fiduciary obligations

Sustainalytics’ ESG Risk Ratings help investors to identify and understand financially material ESG risks in their portfolio companies, including how that risk might affect performance.

“Demand for ESG data is at an all-time high and providing access to that data is paramount to our customers’ success. By incorporating Sustainalytics more than 12,500 corporate ESG research and rating reports into Sentieo’s AI-driven research platform, mutual customers can take advantage of industry-leading research in the workflow they already use every day. We are excited to work with Sustainalytics to empower customers to build smart, long-term ESG investment strategies faster.” Mark Coriaty, CRO, Sentieo

Learn more by joining Sentieo and Sustainalytics for a webinar “Examining ESG Investing Trends with Sustainalytics and Sentieo” on May 6 at 2pm ET.

The post Sustainalytics’ Industry-Leading ESG Research and Ratings Now Available in Sentieo appeared first on Sentieo.

We are excited to continue the evolution of our integrations to support enterprise-class research platform deployments. With the Sentieo V4.6 release, we are launching Sentieo Platform Integrations, a suite of existing (e.g., Slack, Evernote, Microsoft Office) and new ways to integrate with Sentieo.

“We are seeing increased demand for large-scale, enterprise deployments of modern investment research platforms. Sentieo Platform Integrations is going to deliver new ways for our clients to get insights, from all their research content, while providing the opportunity to leave behind failed RMS integrations.”

Naman Shah, Co-Founder & President, Sentieo

New integrations include support for bringing research and other content from Box and Dropbox into Sentieo Document Search, and Sentieo Platform APIs for notes integration and Security Master management to facilitate large-scale enterprise deployments of Sentieo.

We are also opening up access to our Smart Summary sentiment and topic analysis so uploaded content, such as earnings call draft transcripts, can be run through our models.

This latest release also includes:

• more enhancements to our new iPhone app, including the ability to now access Price Monitor
• more flexibility for dashboard viewing and sharing
• more features to improve your thesis sheets

With even more support for existing content, tools, and workflows, investment analysts and corporate researchers will save more time, reduce context switching between disparate systems, and bring the power of Sentieo’s AI-powered search and analytics to all of their content.

Sentieo users can learn more about the Sentieo V4.6 release in the release notes. If you are not yet a customer and would like to experience the difference an integrated research management platform can make, contact us for a free trial.

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The State of ESG Research Management

With public, investor, and regulatory pressures rising to integrate environmental, social, and governance (ESG) principles and transparency into investment research and decisions, institutional investors are struggling to find, analyze, and centralize the deluge of information provided by companies and ratings organizations. 

In fact, research conducted by McKinsey in 2019 “highlighted that while 90 percent of companies report on sustainability, only 15 percent of investors can successfully integrate this information into their investment decisions.”

The lack of ability to effectively and efficiently integrate ESG factors into investment research workflows leads to a significant amount of time wasted by expensive ESG and fundamental analysts, missed insights that could deliver better results, and a lack of confidence in ESG-driven investment decisions.

ESG Investing: Mainstream & Delivering Results

ESG investing has come a long way since Who Cares Wins, the report that made the case for integrating ESG factors into capital markets, was published in 2005.

Long considered a niche investment strategy, ESG investing has become mainstream, with assets under management using sustainable investment strategies on the rise across the globe:

The US SIF Foundation’s 2020 biennial Report on US Sustainable and Impact Investing Trends found that sustainable investing assets account for $17.1 trillion or 33% of the total U.S. assets under professional management–a 42% increase over 2018.

PwC Luxembourg’s late 2020 report, The growth opportunity of the century, called ESG a “paradigm shift” with European ESG assets forecast to make up “41% to 57% of total fund assets in the region, compared to the 15% of assets ESG accounted for at the end of 2019.”

In 2019, research from The Economist Intelligence Unit found that 76% of Gen X and Millennials in the UK say “it’s increasingly important to consider ESG factors when investing.”

And from Morningstar to Morgan Stanley, JUST Capital, RBC Global Investment Management, and Goldman Sachs, research shows that ESG investing pays off in terms of performance and returns.

ESG Research Obstacles

Despite strong returns and rising interest in ESG investing, institutional investors continue to struggle with the best way to confidently integrate ESG factors and research outputs into investment decision-making processes.

Proliferation of documents and data

The growing amount of financial and non-financial data points and documents that need to be consumed by ESG analysts and the typically small teams doing primary research is overwhelming, requiring complex fact-finding exercises and use of multiple tools and channels for sourcing from:

• Publicly-traded companies
• ESG ratings organizations (such as Sustainalytics, JUST Capital, and MSCI)
• Sell-side research
• Industry oversight groups

Lack of transparency and standardization

There are no standards for corporate sustainability reporting and disclosures as there are for financial disclosures, making it difficult to validate claims and reconcile this information to make comparisons between companies.The same thing applies to the growing body of third-party ratings, all of which have their own methodologies for evaluating a company’s track record on ESG factors.

Fractured research workflows

With disjointed processes and systems used to conduct and track research across teams of ESG and fundamental analysts, capturing and auditing all of the source material and engagement interactions–internally across teams and externally with company management–is time consuming and resource intensive at best and nearly impossible at worst.

Regulation on the Rise

When it comes to transparency and standardization of methodologies and reporting to support ESG investment strategies, legislators and regulators are starting to step up, particularly in Europe.

Europe’s SFDR Deadline Approaching

The first major milestone in the European Commission’s Action Plan on sustainable finance is swiftly approaching, with a March 10, 2021 deadline for compliance with SFDR, the Sustainable Finance Disclosure Regulation. SFDR imposes transparency and disclosure requirements on institutional investors and asset managers, including:

• Written policies on the integration of sustainability risks in the investment decision-making process
• Information on the methodologies used to assess, evaluate, and monitor the effectiveness of sustainable investments
• Periodic reports on the impacts of sustainable investments

UNPRI Signatories Growing

Some 2,600 global asset owners and managers, representing $103 trillion in assets, have committed to incorporating ESG issues into their investment analysis and decision-making investment processes by signing the United Nations Principles for Responsible Investment (UNPRI). Compliance with UNPRI mandates includes:

• Incorporation of ESG factors into 50% of total AUM
• Centralized capture and aggregate reporting of both internal and external engagement on ESG factors

SEC Exploring ESG Disclosure Standards

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What happened?  

We are still below from where we were in terms of the number of transcripts (monthly counts) that mention “bitcoin” versus the prior period of enthusiasm during the 2016-2018 price run-up (the red line below is the BTC price). 

We are also not seeing a big change in the composition of the companies discussing bitcoin. 

In our database, we see 284 transcripts with mentions of bitcoin during the “peak” 2017-2018 period. But only 52, or around 18%, of these are from companies with (current) market capitalizations of over $50 billion. 

This is roughly comparable to the proportion for the last 6 months, we see 15 transcripts from the large ($50 bn+) capitalization companies, versus 78 overall, or around 19%. 

But here is something that is very different from the prior surge: “nobody” talks about “blockchain” the underlying technology, any more. This indicates to us that the current surge in interest is heavily focused on the use of bitcoin as a currency. 

Bitcoin presents an interesting conundrum for corporations and investors alike. 

On one hand, the market in H2 2020 handily rewarded the pioneer in corporate bitcoin purchases Microstrategy (Nasdaq: MSTR), a 30-year old software company. Its market capitalization went from under $2 bn to as high as $12 bn, closely following the rise of bitcoin itself. 

Tesla’s recent move into BTC also made headlines: unlike MSTR, TSLA is not controlled by its founder/CEO, and is in the S&P 500 index. This is likely paving the way for future “household name” corporate adoptions as well as recent announcements around custody capabilities by some of the largest players in the space. 

But the interest (and reward) in indirect bitcoin plays is also probably partially due to the lack of a direct US-traded exchange traded product. We have seen very persistent premiums to NAV (Net Asset Value) for GBTC, a Closed End Fund holding BTC but without the standard ETP creation/redemption mechanism (in the chart below, we are estimating the GBTC NAV by multiplying BTC by the BTC/share amount of 0.00094898, and then subtracting it from the GBTC price). The most up-to-date premium/discount data is available on the GBTC website.

The accounting for a “regular” corporation holding BTC is fluid (we are quite certainly not accountants nor are we lawyers, so this is not advice: but do read this overview in CFO Magazine). While the article suggests that BTC is an indefinite-life intangible (so “no mark-ups”), the SEC says whether a crypto is a security “depends” while the IRS says it is “property.” 

Stepping back, we do wonder if it makes sense to “hodl” BTC if investors can do that relatively easily, and if BTC is a suitable treasury asset in terms of volatility: bitcoin did suffer a ~50% drawdown in March 2020 during the COVID selloff, and a ~75% drawdown during the 2018-2019 decline. 

We will leave you with a handful of selected comments from the recent calls.

Visa is positioning itself as the intermediary between cryptos and “the real world”.

GM, unlike fellow automarket Tesla, has no plans “full stop”.

CME has added Ether to its crypto futures products.

WETF is seeing inflows in its ETP mentioned above.

The early adopter MSTR is going all in.

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We have been monitoring “The Big Four” social media companies (Facebook, Twitter, Snap Inc., and Pinterest) for a while. We published a very long and very bullish piece on Pinterest in Forbes shortly after the company’s IPO in May 2019. We specifically stated:

“To summarize our view, we see Pinterest as a unique advertising and potentially ecommerce property that has established a very attractive vertical, and is only now turning on the monetization “machine.” Valuation is not dissimilar to what we saw in early Facebook, but with substantially lower business risks: we know what works.”

Pinterest has more than quadrupled in price since then, from $20 to over $80. 

We have “the receipts” on Snap and Twitter as well: our co-founder and Chairman Alap Shah was interviewed in Barron’s in January 2019, expressing a bullish view on Snap (the stock has around 10x’ed since then). We covered Twitter in our July 2019 picks: the stock was at $35 then, and it is at over $70 now. 

Looking at the Q4 2020 reports, we continue to be positive on the space. 

In terms of overall revenues, all four had record quarters: in the data viz below, we have aligned the origins of the revenues of the companies (and moved Facebook to a left axis, since they are so much larger). We can see that both Pinterest and Snap are “above trend”, and Twitter’s revenue has inflected upwards. (Watch how to make this chart on YouTube)

(interactive chart link) 

In terms of reported revenue growth on a year-over-year basis, we can see that the COVID impact was very short-lived (and shallow, in the case of Facebook). Both Pinterest and Snap are at all-time or multi-year highs in revenue growth, while Facebook, despite its size, is still a 30% grower. Twitter has been below the group, however, we fully expect acceleration there as well with its improved ad stack, extensive new product innovation, and dramatically improved monetization. (Watch how to make revenue growth charts in seconds on YouTube)

(interactive chart link)

The Street estimates for strong revenue growth continue for 2021 as we can clearly see below. Even the 2022 numbers are in the 20-40%: revenue growth rates that would be the envy of non-tech companies everywhere. 

(interactive chart link)

To illustrate the striking contrast between the share gainers/new market players (FB TWTR SNAP PINS) and traditional advertising, we can look at how the FY2020 and FY2021 revenue estimates for Omnicom (NYSE:OMC), a “traditional” advertising agency, have been contracting for five straight years.

(interactive chart link) 

Even previously “safer” outdoor (billboard) advertising plays, like Clear Channel Outdoor (NYSE: CCO) have seen dramatic declines in revenue estimates.

(interactive chart link)

We are also seeing record KPI numbers. For example, below we have used our Table Explorer table chaining and visualization tool to show Snap’s daily active users (DAUs.) (watch how to use Table Explorer on Youtube) 

Pinterest, which reports monthly active users (MAUs), looks similarly steep.

Specifically for Pinterest, we can also see the constantly improving monetization (average revenue per user, or ARPU) over time, along with the big difference between U.S. (almost $6 in the last quarter) versus international (just $0.35 per user). The increased monetization is still a big part of the thesis there, as we had outlined almost two years ago, though more of it is priced in.

Digging into our Natural Language Processing (NLP) trending topics inside of the transcripts, we did notice the dramatic increase in mentions of Apple on Facebook’s calls (13 vs 0-2 most other quarters), along with the negative sentiment. (Read how to get company- and sector-level insights through our NLP technology here).

We also saw Apple’s iOS14 mentioned by Facebook in the Headwinds category around targeting.

For contrast, we can see WhatsApp mentions are frequent (around 10-20 per call) and consistently positive over time.

To get up to speed quickly on the issue, we decided to look across the four transcripts for Apple or iOS or IDFA. We immediately spotted that Facebook is by far the most active in discussing these changes.

Switching to our newly-released Snippet Summary view, we can read the conversations side-by-side. 

More specifically, the comments range from “modest impact” for Twitter and “keeping our eye on that” for Pinterest, to “sharing the stories of small businesses worried that Apple’s iOS 14 changes will hurt their ability to reach customers” from Facebook. As we know, the tension between Apple and Facebook has spilled to full-page newspaper ads.

We decided to dig deeper into the issue, and redline the 10-K language around the same term in these companies filings. (Watch how to redline any two SEC documents on YouTube)

In Facebook’s 10-K, we see added language around “third party policies”:

As well as additions to the targeting risk factor:

We see similar additions across Snap Inc.’s 10-K:

But the market overall seems more concerned about Facebook than the other three players (if we judge by looking at the returns over the last six months since the iOS changes were announced over the summer).

.

(interactive chart link)
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The upcoming 55th edition of the Super Bowl, the championship game for the U.S. National Football League, will be… unprecedented. We do not like using this word (see its rise chronicled in the New York Times using our data) but it is true. The pandemic has brought about serious attendance and activity restrictions to what is normally one of the largest events in the U.S., and we’d expect lower social viewing gatherings. 

Here are some of the themes and stocks we are keeping an eye on. 

First-time advertisers

So far, from the public companies that we monitor, two big pandemic winners have announced their debuts: fast-casual restaurant chain Chipotle (NYSE: CMG) and restaurant delivery giant DoorDash (NYSE: DASH). A diaper brand, Huggies, by Kimberly-Clark (NYSE: KMB), will also make its first appearance. We will also keep an eye out for online car dealer Vroom (Nasdaq: VRM): the ad is already released. Vroom IPO’ed last summer. We share some thoughts on each below.   

Notably, the market capitalization of DoorDash (the company IPOed in early December 2020) is larger than that of most players in the restaurant industry, including several shown here (Chipotle, Yum! Brands, Yum! China, Restaurant Brands International (parent of Burger King, Tim Hortons, and Popeye’s), Domino’s Pizza, and Darden (parent of Olive Garden and other brands) 

Choosing to advertise, Huggies was interesting to us: there have been concerns about birth rates during the pandemic (The Brookings Institution published estimates in December 2020, pointing to hundreds of thousands of “missing” births; for comparison, the latest CDC data shows the U.S. had 3.8 million births in 2018).

But here is another “alternative data” point: in October 2020, Church & Dwight (NYSE: CHD) reported double-digit (!) growth in the sales of its pregnancy kit brand, First Response.

Contrast this to their April 2020 comments that pointed to negative year-over-year change in sales for pregnancy test kids (as well as condoms, dry shampoo, and electric toothbrushes). 

It is entirely possible to view the pregnancy test kit sales spike as a leading indicator, and assume that Kimberly-Clark knows something that maybe the economists at The Brookings Institution do not. 

We decided to take a look at the year-over-year percent change in search interest for both Huggies (in red) and, if we can use this word for diapers, its arch-rival, P&G’s Pampers brand. We see that both had a major spike (100% for Huggies) around the first round of lockdowns in March 2020 but have drifted down steadily since, and are now flat on a year-over-year basis. 

Vroom’s best known direct comparable is Carvana (NYSE: CVNA) but there was a very recent SPAC deal in the space, CarLotz is now public (Nasdaq: LOTZ). CarLotz ceremonially rang the opening bell on the Nasdaq on January 25th, 2021. Given VRM’s recent public market debut, we think the stock could get interesting following its advertising debut.

In terms of revenues, both VRM and CVNA are much smaller than the established leader in used car sales, CarMax (NYSE: KMX).

And in the last two years, both CVNA and VRM have generally had stronger topline growth, versus KMX.

Who is NOT advertising this year?

While USA Today reported that the list prices for 30-second spots have softened somewhat this year, it clearly was not enough for a number of mainstay advertisers and brands at the event. 

Traditional advertising was hit very hard by the pandemic as we can see in both the absolute revenue (in blue) and the year-over-year revenue change (in red), along with the analyst estimates, for Omnicom (NYSE: OMC), one of the largest players in the space. Analysts do not expect pre-pandemic revenue levels through 2022. 

We are also seeing somewhat subdued overall marketing interest: one of our favorite alternative data indicators is the number of press releases referencing “the big game”, a common approach to avoid running afoul of any trademark problems yet a pretty clear reference to the Super Bowl. While the event was 5 days earlier in 2020 vs. 2021 (February 2nd vs February 7th), we are still (as of January 26th), at a fraction of all PRs mentioning “the big game” versus January of last year.

From the companies and brands that have announced that they will skip this year’s event, the ones that stood out to us are Budweiser, Coca-Cola, Pepsi, Ford, Olay (P&G), and Hyundai. To be sure, AB InBev (NYSE:BUD) will be running ads for some of its other brands, while the Budweiser time will be donated to a vaccine awareness campaign. 

But it is entirely possible that skipping the Super Bowl this year but creating a conversation around it is just as effective: search interest in Avocados from Mexico, a 5-year advertiser that is also bowing out, was at an all time high in the latest data. 

For AB-InBev, Coca-Cola, and PepsiCo, pulling back this year makes sense. Exposure to food service and on-premise consumption resulted in double-digit revenue declines for BUD and KO (PEP has a large food business so it did not see as large of a dip).

Past Results 

Interestingly, there are studies on stock price performance following advertising during large sporting events. For Super Bowl advertisers specifically, this 2010 study found a significant positive stock price effect in 2-4 days after the ad. A similar study by different authors also found outperformance for the stocks of the advertisers in the 1996-2010 period. The same authors also found a positive effect from Olympics sponsorships between 2000 and 2010. There is further confirmatory evidence from the 2012 London Olympics: UK sponsors experienced statistically significant share price increases. 

We can confirm some of this using our stock price returns seasonality matrices. While Nike (NYSE: NKE) has been one of the biggest “long term winners” in the US equity markets, more than half of their 19% annual returns for the last 15 years has come in calendar Q3: typically the time that both FIFA World Cup and the Summer Olympics take place.

We are seeing an even stronger dynamic with their Japanese competitor Asics (TYO: 7936): almost all of their returns for the past 15 years have been in calendar Q3.

The seasonality with Adidas (Xetra:ADS) is also the strongest in calendar Q3.

And we can see that the then-upcoming Olympic Games in Tokyo were surfaced as the number one trending topic on Nike’s last conference call before COVID (read more about our NLP Trending Topics on our blog here).

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