Monday, May 1, 2023

1QTR23 UO Matrix via Applied Indexation


In advance: 1QTR23 <U/O> Matrix via Applied Indexation is currently available in multi-sheet format utilizing the modularity of business segment operations to illustrate effective Alpha and Alpha-Beta screens derived from a combined Renewables/Diversified Industrials/Technology sector-themed overlay within publicly traded Clean Energy Subindustry Benchmark ETF - PBW.

>> PBW total return: 1Q23 +6.7%, CY23 -6.4%; 12-month performance dispersion +127.0%/-56.0% (042823).

>> SPX 12-month Fwd PE=18.1/042823 v. 17.8/1Q23, 17.3/4Q22, 15.8/3Q22, 17.5/2Q22 (FactSet); CAPE 29.7 from 29.2/27.5/31.1/34.6, mean 17.0 (Shiller).

>> PBW Fwd adj. PE=29.8 Beta=1.5 versus 26.7/1.5, 31.9/1.5 and 30.4/1.5 sequentially [40.0 limit; N/A totals 54.6% (v. 62.0%) based on portfolio weight and 61.3% of count (-0.9%), 10.5% on market capitalization (-5.9%); Large-cap 21.3% (+3.1%), Mid-cap 47.5% (+2.0%), Small-cap 31.2% (-5.3%)].

<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, 61 classifications, 256 single and multi-listed component members; n=75).

Current capital markets sentiment indicates consensus on approaching near-term peaks in both rates and equity valuations, evident in select benchmark proxy ETF total return performance comparisons: e.g., Smart Beta Quality factor ETF (QUAL +11.1%, CY23 042823) over the S&P500 ETF (SPY +9.2%) bested by Large-cap technology Nasdaq 100 (QQQ +21.3%; FY22 -32.6%). Given ecosystem dynamics and supply chain verticals prevalent in institutional portfolio strategies (conventional, index-plus, long/short, niche, thematic, megatrend, factor-based), the permanence of tiered/laddered risks to valuation across economic cycles and subcycles underscores persistent opportunities to capture breadth of performance dispersion within an investment universe.

<U/O> Matrix via Applied Indexation characterizes the corporate composition of component members within an assigned benchmark, defining parameters of differentiated growth rates within companies then linking to peers via business segment operations (Large-cap, Mid-cap, Small-cap; international and domestic). Proprietary research suggests refined hierarchical data sets improve analytics, isolating drivers of valuation at distinct points of inflection. This, coupled with competitive market information and embedded forward looking fundamental analysis, efficiently profiles idiosyncratic catalysts on a portfolio-weighted segment/classification relative basis to isolate Value in Growth (and Growth in Value; cross-asset, multi-factor).

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 at

#EnergyComplex #CleanTech #Renewables #Strategy #PortfolioManagement #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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