AB Bernstein report issued today “Reporting quality and improvement opportunities” points the finger exactly where the issue is, when it comes to properly understanding the fundamentals of a brand in luxury goods listed companies. Investors are attracted by sector profitability (multiples show that), but the level of information they have, to make informed long-term investment decisions, in limited.
Just to name one, no listed brand discoses figures on their online retail sales – which has been the fastest growth channel in the industry and in the Covid19 months the only distribution channel still active (undoubtfully a crucial infdormation for investors) – in their financial reports.
Alternative data is helping shed a light exactly on these points: digitalization grows the number of available data points, from prices, to promotions to many more business sensitive datasets.
All investors we serve have different strategies and investment vision, but the common line we identify, is the need to fill the information gaps in financial reporting. We provide from boutiques database to revenues estimates, according to sophisticacy of our clients, but for all of them, what described in today’s AB Bernstein report, is the exact source of alpha, created by information asymmetry.