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Jan 18, 2017 - Our Predictive Factors and Terminology ... Thomson Reuters StarMine analytics measures analyst estimate a
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North America Q4 Earnings Surprise Forecast Tim Gaumer, CFA, Director of Fundamental Research David Aurelio, Senior Research Analyst Thomson Reuters Financial & Risk 18 January 2017

Agenda • Forecast History • Our Predictive Factors and Terminology

• Eikon Earnings Season Report App • Screening Methodology and Factors – Live Demo • Our 10 Stocks Most Likely to Report a Positive or Negative Surprise this Season

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Predictive Factors and Terminology

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Thomson Reuters StarMine analytics measures analyst estimate accuracy over multiple fiscal periods, comparing the forecast on each day to the actual results. To get a high rating for estimates, analysts need to be both different from the mean and more accurate Our ratings are persistent: This year’s 5-star analysts are four times more likely to earn 5 stars next year than to drop to 1 star The analyst depicted to the right earned a 4-star rating for the Summary period based on strong performance in five of the six fiscal periods

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StarMine provides an objective measure of the quality of analysts’ accuracy and stock picking skills.

SmartEstimates put more weight on the more recent forecasts and the better analysts.

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Significant Predicted Surprises (>2%) are directionally correct 70% of the time.

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Earnings Season Report

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Eikon Earnings Season Report App (EARN): Track the Earnings Season as it Unfolds

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Eikon Earnings Season Report App (EARN) - continued: Tracking Revisions and Price Reaction

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Screening for Earnings Surprises Live Demo David Aurelio, Senior Research Analyst, Thomson Reuters Financial & Risk

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Thomson Reuters Predicted Surprise Filters • Universe Filters: – Currency = USD – Country of Exchange = North America – Company Market Cap >= $500 Million USD

• Predicted Surprise Filters – Number of Analysts >=5 – Earnings Per Share – Predicted Surprise Flag – Expected Report Date >= Next 60 days • Additional Filters

– ARM ex-Recommendations 12

Thomson Reuters 16Q4 North American Positive Predicted Surprise Screen

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Thomson Reuters StarMine 16Q4 North American Positive Surprise Picks

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Thomson Reuters StarMine 16Q4 North American Negative Surprise Picks

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Q&A –

Please send any questions through the Q&A widget

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Be ahead of the game during earnings season • Register for our webinar on 31 January where we will reveal 10 European companies that may be likely to beat or miss earnings expectations – 2016 Earnings Surprise Forecast • Visit financial-risk-solutions.thomsonreuters.info/Navigating-Earnings-Season for more key materials and insight on how to be ahead of the game during earnings season! • Make sure to visit lipperalpha.financial.tr.com on 14 February for articles on our Asia Top Positive and Negative Picks

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Further Resources • Visit financial.tr.com/StarMine for more information about Thomson Reuters StarMine Quantitative Analytics • Contact [email protected] for further information and copies of a whitepapers on the models. • Lipper Alpha Insight provides a global perspective on market behavior, investments and funds

– Lipperalpha.financial.tr.com – Subscribe to the Investment Weekly newsletter – tr.com/insights

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