Alternative data for researching a company
Article last updated: July 12, 2022
Philip A. Fisher’s Common Stocks and Uncommon Profits book is among one of the best investing books I have ever read. In the book, he coined the term “Scuttlebutt” which I was really intrigued by since first seeing it. Although the methodology in the book works fine, nowadays there are many resources that we as investors can access with ease. In this article, I share with you tools that I find most helpful during researching a company and its businesses.
Going through annual reports and earnings calls is not going to tell us how good the company’s products and services are. In the company’s own documents, we will always find they are the best at blah blah blah, and they are also the leader in their subsegment market. Therefore, the first few tools in the list here are going to focus on the customer’s point of view.
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How to use / product review contents
I am always a fan of trying out products myself. It gives a first hand feel of how good they really are. However, in some cases it might not be possible- the product is too expensive to try, the product is not available in some regions, etc. Nowadays, there are tons of product review videos out there to help us out in all the cases. These reviews can be long and biased, but they can give us a sense of the products more than what a paragraph in an annual report does. Moreover, these reviews do in-depth analysis (in the user’s perspective) comparing the product to its competitors as well. Google and Youtube are your best friends in this case. Here are some examples of browsing Youtube to find out more on how $ROKU, $AMZN, $AAPL and $GOOGL compares with regards to their streaming hardware:
Various product reviewing / rating sites
While the aforementioned tools help us get a sense of how the product looks and feels, it is not enough. As a consumer, at least to me, after learning more about the products, I definitely read reviews from real consumers. There are many tools in the market right now, depending on which markets you are targeting. Here are some examples:
- Software: Google Play store, Apple App store, softwareadvice.com
- Restaurants: Google map, Yelp, Trip Advisor
- Other products: Amazon
Reading through these reviews, we can spot a common theme here including why consumers love it, why they hate it as well as key factors that they consider when using the product, etc.
Communities for specific industry
Just like investing communities, there are communities for other industries as well. These communities can give us information just like the reviewing / rating sites, but they can be more authentic. Furthermore, by getting ourselves into those communities, we can get ourselves up to date on any crucial events or news in such industry. Example tools here are Reddit and Facebook Group. Here is another example of a streaming service on Reddit.
Glassdoor is a website for reviewing companies from both former and current employees. With Glassdoor, we are able to assess the company’s working environment and sometimes how the company is doing recently. After reading through enough of those reviews, you will be able to spot the common pros and cons. Furthermore, there are also CEO approval ratings where you can see how employees think about their own CEO. You can read more about it here (on how to use it) and here (on how each rating is calculated).
By looking at job openings, sometimes we can get a sense of the company’s directions and what they aim to do. You can find those data from the company’s own site as well as various job listing platforms e.g. Linkedin, Glassdoor, etc. The following is an example I got from @AznWeng on Twitter
Google trend gives us historical data on the search volume trends. We are able to compare multiple keywords together in the chart here. Moreover, in some cases, it might give us some color on a short term company’s performance. For example, from the image above, despite Covid lockdown during 2020, Crocs ($CROX) search volume surged which correlates with their performance for the year.
Similarweb (Web / App analyzer)
Similarweb offers us a free service to analyze websites or apps. The data can be very useful for us as an investor. Moreover, we can also compare sites / apps as well. The data includes the platform rank, number of visits, bounce rate, average visit duration, ranking trends, visitor demographics (countries they come from, genders and age ranges), competitors, user acquisition channels, many more.
Try that yourself here.
If you find the list helpful, don’t forget to share it with other fellow investors, and if there are any other tools that you think might be useful, please let me know down below in the comment.
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