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Institutional investors are faced with the many formidable challenges associated with outperforming their market benchmarks in good markets and in bad. Most asset managers tell us the greatest challenge is just getting good information on what is occurring in a company’s operating environment.

At Longbow Research, we add value by breaking through the opaque curtain of disinformation and spin, by providing clear monthly insight on critical trends with such drivers as: pricing, unit volumes, mix, promotional activity, inventories, market share shifts, outlooks, etc. We gather these insights through industry surveys. The market intelligence surfaces through survey summary reports and analysis.

We believe that quality research is what our customers are looking for and deserve.

The Longbow Research Process – Searching for Catalysts

Our research process is relatively simple but effective. Ultimately, we are searching for catalysts. There will always be cheap as well as overbought stocks in the market. Our goal is to be early in identifying the catalysts that will trigger a correction to fair value, and then communicating this to our customers.

We begin with a survey of contacts within a given industry or end market. Depending on the nature of the industry and the questions we are asking, we will speak with anywhere from 30 to 200 contacts in North America, Europe and the Far East. These are largely repeat contacts that we have cultivated over time and have proven to be reliable in their opinions/insights.

We ask about the basic fundamental drivers including pricing, unit volumes, mix, promotional activity, inventories, imports/exports and foreign competition, new product successes/failures, SKU resets, raw materials costs, etc.

The results of these interviews are then mapped onto a quantitative framework that provides statistical distributions of total responses to each question. The distributions are then arranged in a time series and analyzed for change.

While the quantitative analysis is clearly valuable, the anecdotal responses from these contacts are also crucially important as we gather market intelligence and search for potential catalysts.

Our analysts use this insight in a number of ways. Survey summary reports are published for our customers containing a succinct rundown of the key findings as well as a discussion of investment implications. In addition, our analysts use these insights in developing the inputs to their earnings models and deciding upon where to focus in assessing the relative investment merits of a given company. Company reports are then produced including analysis of these drivers.