What we do

What

WHAT?

A fact based investment model upon which opinions and decisions can be made

 

QMG PROVIDES INSIGHTS INTO GLOBAL MARKETS THAT TRADITIONAL RESEARCH DOES NOT

Our innovative and data-driven approach is based around a unique model that analyses large quantities of information and produces monthly observations across the three key drivers of corporate profitability – price, volume and cost. Our research gives our clients a timely and powerful insight into company revenue and margin performance.

QMG PRODUCES FACT-BASED RESEARCH THAT PROVIDES A FOUNDATION UPON WHICH SUBJECTIVE FORECASTS AND QUALITATIVE OPINION CAN BE CHALLENGED

Our work is free from bias, and we have a completely objective process that highlights investment opportunities to clients – built from a foundation of fact. We focus our research at the sector, or product, level and the most fundamental application of our insight enables investors to challenge – or confirm – bottom up assumptions that are included in their own modelling and valuation work.

QMG CAN HELP YOU FILTER OUT THE NOISE
The QMG dataset is at its simplest, a filtering tool and it can be used to highlight areas of an economy you should or should not invest in.

QMG IS INDEPENDENT AND OBJECTIVE

QMG provides an independent, objective and unique research product. Our data is based on national accounts from trusted government sources. On being approached, firms have a statutory obligation to complete a monthly return form, requiring them to reveal how product prices and volumes have moved from month to month. Once compiled, the data gives an invaluable insight into trading performance at the product level, albeit still in its raw form. QMG’s modeling then analyses this raw information such that data for a particular month is available only a matter of weeks after its end.

THE QMG MODEL WAS BUILT ON YEARS OF EXPERIENCE

The QMG model was created by a highly regarded economist, Dr Savvas Savouri over 18 years ago. It’s a model that has been used as an internal idea generation platform and has been continually refined to the model now available to investors today. Investors / economists don’t have to recreate economic models, they can gain insights into industries/sectors/stocks within a few seconds via our online app. Moreover, with the shortcomings of traditional sell side research and corporate governance becoming ever stricter, access to a reliable and independent source of data will become all the more important.

QMG PROVIDES MORE TIMELY DATA

Our system constructs a measurement of business performance on a monthly basis. It thus provides an invaluable in–fill between the traditional six– monthly reporting periods in Europe, and quarterly reports in the US. Example below shows how often QMG analysis is available versus a typical US listed equities earnings announcements.

Calendar

QMG DATA CAN CHALLENGE THE CONSENSUS 

A consequence of access to less market sensitive information (eg analyst access to company management is cut off during ‘closed periods’) is that sell-side research is becoming far too similar. In this world analysts are forced to differentiate by making highly subjective assumptions.

QMG provides a completely objective process that highlights investment opportunities to clients – built from a foundation of fact. We focus our research at the sector, or product, level and the most fundamental application of our insight enables investors to user our data asa foundation to challenge – or confirm – bottom up assumptions, subjective forecasts and qualitative opinion included in their own modelling and valuation work.

QMG COMPLIMENTS THE INTERNAL RESEARCH TEAM

QMG data is  used by our clients as part of their investment process/workflow helping them make more informed decisions and deliver better performance. We cover nine markets, extending across 650+ products and have mapped our data to approximately 1500 stocks. Our data is updated every month and the insight that our analysis provides can include early identification of inflection points as well as highlighting potential opportunities based upon a divergence between our observations and consensus estimates/corporate guidance. We tailor our research to the individual needs of our clients.

QMG IS A DIFFERENTIATED ALTERNATIVE

QMG provides data-driven insights across global markets that traditional research does not. In our 2 years of existence promoting this product to global institutional investors we have not encountered any other companies providing a service like ours. Our innovative and data-driven approach is based on a unique model that analyses large quantities of publicly available information and produces monthly observations across the three key drivers of corporate profitability – price, volume and cost. The 18+ years of building up the model plus our time getting it in front of clients offers clients the chance to be provided with a service that is already, and will continue to be, ahead of the curve.

DECLINING VALUE OF SELL-SIDE RESEARCH

A report by Frost consulting shows that global spend across investment banks on research resources had been tracking downwards since 2008 and this has contributed to consensus forecasts having become reliant on company guidance for direction and being relatively non-responsive to new information. QMG relies on trusted national accounts to provide its monthly insights.

Why2

REGULATORY CHANGES
Globally, it is clear that market regulators are determined to ‘unbundle’ or separate payments for the provisions of research from the commission charged on trading activities. The changes proposed under MiFID II are the most advanced in this sense and are already forcing fund manager clients to look beyond traditional research sources and providers. From QMG’s perspective, these changes are a benefit in the sense that:

Traditional research providers will be forced to scale back their coverage if they cannot afford to cross subsidise its production– we see this as providing a more level playing field for independent research providers.
Investment managers will be required to be more selective in what they pay for and thus who they pay. In the UK for example, research must be ‘substantive’ – this will eliminate the leakage represented by ‘payment for relationship’.
Research may have to be paid for directly – this alone represents a significant benefit to the independent providers, who, to date, have relied on CSA platforms to facilitate payment

 

DATA DRIVEN ANALYSIS ASSISTS IN DRIVING BETTER INVESTMENT DECISIONS
The ever increasing amount of information that investment managers now have access to – and are required to analyse – is becoming a significant problem. Not just in the way that it requires better usage of technology to assist in ‘filtering’ available information but also in the sense that this information ‘overload’ puts a stronger focus – and value – on data-driven research which helps separate fact from fiction.

 

THE QMG MODEL TIES THE BIG PICTURE (MACRO) TO THE COMPANY (MICRO) 
Too many sector analysts focus only on company specific matters, and thus miss the ‘bigger picture’. QMG data focuses on industry-wide themes and then relate them down to the company level as relevant. Our analysis focuses on economic, not accounting, profitability and therefore represents a more accurate picture of a companies performance. For example, our price data would include surcharges and subsidies which is an accurate reflection of actual charges rather than list prices. As the data that QMG collects is derived directly from the companies (albeit at a level just above the individual company) the signals generated each month are hard to ignore.

updated pretzel

This circular flow of information is not without fault as there are month where the signals emerging from the detailed sector level data fail to match the aggregated earnings figures reported by a cohort of companies operating within the specified sector. This inconsistency can be explained by the diference between economic and accounting profitability. Our methodology takes no account of tax or interest costs, depreciation or amortisation, and it could be said, therefore, that it leads to a cleaner measure of how earnings evolve with time (a point made earlier). Clearly, the performances of stocks and sectors are driven by a host of factors, of which earnings momentum is but one. Moreover, investment is not a laboratory science, with regular unanticipated shocks influencing stock and sector performances. Such shocks include corporate action as well as geopolitical events.

QMG GETS STRAIGHT TO THE POINT WITH VISUALS
QMG tells insightful data stories using charts and key observations. Using our data visualisations users can see the changes or specific revenue trends for the 600+ sectors we cover. Our charts are designed to act as a barometer of each sector’s trading performance and users can gain quick insights into industries or sectors they care about and move on to other value add tasks as part of their workflow.

Below is an example of the price, cost, volume growth at an overall country level for the United States.

USA - pcv

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