Tuesday, January 17, 2023

4Q22 UO Matrix via Applied Indexation

In advance: 4QTR22 <U/O> Matrix via Applied Indexation is currently available in multi-sheet format illustrating structured ecosystem composition and supply chain verticals within publicly traded Clean Energy Subindustry Benchmark ETF - PBW.

>> PBW total return: 4Q22 -19.2%, CY2022 -44.5%; 12-month performance dispersion +172.0%/-79.5% (011323).

>> SPX 12-month Fwd PE=17.3/4Q22 v. 15.8/3Q22, 17.5/2Q22, 19.0/1Q22 (FactSet); CAPE 29.2 from 27.5/31.1/34.6, mean 17.0 (Shiller).

>> PBW Fwd adj. PE=26.7 Beta=1.5 versus 31.9/1.5, 30.4/1.5 and 34.4/1.4 sequentially [40.0 limit; N/A totals 62.0% based on portfolio weight (+5.4%) and 62.2% of count (+2.4%), 16.4% on market capitalization (+6.0%); Large-cap 18.2% (-2.1%), Mid-cap 45.5% (+1.7%), Small-cap 36.5% (+0.6%)].

<U/O> Matrix via Applied Indexation segments include Wind, Solar, Fuel Cells, Smart Grid, Water, LED, Biofuel, Automotive, Natural Gas, Storage and Aviation plus further classifications detailing component member assignments based on corporate business segment operations (12 segments, 60 classifications, 250 single and multi-listed component members; n=74).

<U/O> Applied Indexation methodology introduces the concept of business segment operations (BSOs) as a means demonstrating the capacity to link component member corporate profiles within a designated benchmark index/proxy across capitalization and asset classes. On this basis, differentiated growth rates embedded in a company's revenue line provide an opportunity to construct composite Alpha and Alpha-Beta screens borne from the refinement of standardized component member sector/industry nomenclature assignments and modularity offered by BSOs. Competitive market information and corresponding BSO quantitative inversions capture respective points and relative depths of inflection, more accurately profiling fundamental drivers of valuation.

<U/O> Matrix via Applied Indexation illustrates an iterative process designed to improve peer group analytics and isolate ranged performance dispersion among benchmark component members. In just one abstraction, recent market- and equal-weighted portfolio strategy total return performance differentials serve to underscore the importance of a disciplined latticed approach in managing the fluidity of cross-sector multi-factor variables persistent in alternating/convergent/divergent/reverting economic and policy cycles/subcycles (investable motifs: conventional, index-plus, long/short, niche, thematic, megatrend and factor-based).

Please message direct for product suite access and development considerations; reference ‘<U/O> Matrix - Establishing Predictive Value: Applied Indexation, Hierarchical Data Sets and Competitive Market Information’ slideshow tutorial for background methodology.


#EnergyComplex #CleanEnergy #Renewables #Strategy #PortfolioManagement #PortfolioStrategies #CorporateFinance #BSOs #Analytics

At Venn’s intersection, sets and subsets of competing interests endure. The dynamic principles of BSOs are three-fold: 1) multinational and Large-cap companies function as benchmark sector/industry/subindustry proxies based on scale (Alpha-Beta), 2) Small- and Mid-cap companies participate as competitive peers (Alpha) and, hence, acquisition candidates and 3) among subsets of 1) and 2) are companies provisioning multiple economic sectors, asset classes and geographies. Successful trading strategies (conventional, systematic, factor-based) and adaptive investable motifs (niche, thematic, megatrend) isolate Value in Growth, and Growth in Value, by aligning the prospective Alpha drivers directly associated with ecosystem composition and supply chain verticals.

Forward looking statements, estimates and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to be reliable but are not assured as to accuracy. Past performance is not indicative of future results. There is neither representation nor warranty as to the current accuracy of, nor liability for, decisions based on such information. This content is distributed for informational purposes only and should not be considered as investing advice or a recommendation of any particular security, strategy or investment product. The author's opinions are subject to change without notice. No part of this product, related articles, publications or web-based content may be reproduced in any form or referred to in any other publication without express written permission of Universal Orbit © 2023 and David B. Kleinberg.

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