Wall Street Horizon Ups Buy-Side Focus, Hires Research Director
Tue October 28, 2014
Woburn, Mass.-based corporate earnings and event data provider Wall Street Horizon is increasing its focus on the buy side after a recent academic study found that the vendor's earnings date revisions data could be used to predict stock movement, and has hired a new director of research to educate buy-side firms on how best to use its data.
In the last month, research from the Massachusetts Institute of Technology leveraging Wall Street Horizon's data demonstrated that the way companies reschedule their earnings announcements can be used as an indicator of their economic performance. According to the research, companies that push back their earnings announcements dates are more likely to report earnings below forecasts, while those who move up dates are most likely report better-than-expected earnings.
Following the research, which analyzed more than eight years of earnings calendar data from Wall Street Horizon, the vendor has received an influx of inquiries from buy-side firms looking to leverage its data to inform their investment strategies.
Typically, firms react to earnings announcements when companies actually release financial reports, but the announcement date revisions data could be used to predict how the companies' stocks will move days or weeks before the actual announcement, says Barry Star, managing director of Wall Street Horizon.
"When a company moves its earning data earlier, that's a bullish signal, and if a company moves back, that's a bearish signal. You can make a lot of money buying stocks of companies that move the date forward and selling stocks that move the date back─obviously with some provisos" Star says, noting that the alpha to be gained from the signals will not be immediate, but may take hours, days, or weeks to be realized.
To help its growing buy-side client base incorporate the data into their quantitative models, the vendor has hired Ian Arvin as director of research. Prior to joining Wall Street Horizon, Arvin was principal and founder of Needham, Mass.-based independent quantitative equity research firm Innovative Quant Solutions for the past 10 years, prior to which he served as portfolio manager at Franklin Portfolio Associates, and principal at Independent Investments.