A Schematic of Decision Making: Corporate Finance and Capital Markets
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).
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Reference ‘<U/O> Matrix - Establishing Predictive Value: Applied Indexation, Hierarchical Data Sets and Competitive Market Information’ slideshow tutorial for background methodology (click here).