New Constructs Launches AI/ML Generated Data API

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Nashville, Tennessee based independent research provider, New Constructs recently announced the launch of a new data API to deliver the proprietary data and analytics behind its profitability and valuation models for U.S. stocks, ETFs, and mutual funds in a more quant-friendly format.

  1. Provide general background on your firm. When were you founded, etc.

Founded in 2002, New Constructs provides quantitatively derived insights into the fundamentals and valuations of private and public businesses. New Constructs uses NLP, incorporating machine learning, to extract data from the unstructured portions of financial filings — the financial footnotes and the management discussion and analysis – to create valuation models, research ratings, and now a data API for various types of investor clients.

Top hedge funds and institutional money managers, wealth management firms, advisors, accountants, insurance companies, and consulting firms leverage New Constructs’ data and models to lower risk and improve performance.  Click here to learn more about New Constructs’ various clients and distributor partners.

  1. What type of data does your firm provide?  Outline the unique data elements an asset manager can receive from you that are not generally available from others?

New Constructs provides traditional fundamental data collected from U.S. public companies’ income statements, balance sheets, and cash flow statements. The firm also collects and provides a wide range of proprietary data collected systematically from both the footnotes and MD&A, which are necessary to understanding true earnings and cash flows.  Click here to get more detail about the various data types New Constructs provides as part of its datafeed.  New Constructs collects this data for over 5,000 U.S. publicly traded stocks, 650 ETFs and 7,000 mutual funds.

  1. How much history can a client obtain from you? How frequently is this data updated?

New Constructs provides historical data back to 1998, updated daily (whenever a new 10-K or 10-Q is published).

  1. Describe at least one “case study” of where your firm’s data has proven to be predictive.

New Constructs research and data have proven to be predictive a number of times in the past.   Most recently, The Financial Accounting Standards Board (FASB) introduced a new accounting standard (ASU 2016-02) that requires companies to recognize operating lease assets and liabilities on the balance sheet.   This new accounting rule added nearly $3 trillion to corporate balance sheets in 2019 Q1. Operating lease obligations, formerly buried in the footnotes, must now be reported as a liability – and corresponding right of use asset – on the balance sheet.  All of New Constructs research and models have historically applied this convention enabling clients to be unaffected by the new FASB changes.

  1. Who is your firm’s target market in the financial services vertical?

New Constructs’ new data API service is aimed at quantitative investors, and portfolio managers, and analysts at hedge funds and long only asset managers.

  1. Who are some of your firm’s chief data competitors in the financial services market?

New Constructs’ primary competitors for its new datafeed are traditional data providers and research firms. However, the firm is open to partnering with traditional data providers instead of competing with them. The firm’s unique technology complements the data assets of traditional market data vendors.

  1. What makes your firm different from other firms providing similar types of data?

New Constructs data is more accurate, complete and timely than financial data collected in the traditional manual fashion used currently by most data vendors.  In the next few months, Harvard Business School and MIT Sloan will be publishing a research paper proving the incremental benefits of New Constructs’ data.

  1. Who are a few cornerstone clients in the financial services market that use you?  How do they generally use your platform?

Both equity and fixed income portfolio managers have been using the firm’s excel addin to get data via the firm’s API for over a year. Current quant clients take data via FTP or from New Constructs’ website. The new API platform aims to expand distribution of larger data sets to more quant clients. New Constructs has a number of firms testing the new data sets now available from its API.

  1. What is your firm’s commercial model?  What is the price range for your service?

New Constructs has a wide range of pricing for its new data API depending on the breadth of data consumed and the use of this data.  More details about exact pricing should be directed to New Constructs management.

  1. What are a few of your firm’s next major targets/milestones?

One key milestone for New Constructs new data API includes the publication of Harvard Business School and MIT/Sloan’s article addressing the value of the New Constructs data.  This article should be published in the next few months.

Another key milestone for New Constructs is the release of its data API on a number of alternative data platforms, including BattleFin Ensemble, NASDAQ / Quandl, and others.

  1. What are a few interesting facts about your firm?

New Constructs has been using NLP, machine learning, and artificial intelligence since 2002 to automate the process of accurately extracting data from the financial footnotes and the management discussion and analysis of public company financial filings.

New Constructs specializes in evaluating accounting data for thousands of companies in order to identify material anomalies that distort these companies’ income and cash flow statements.

  1. Contact information

New Constructs, LLC
David Trainer
CEO
david.trainer@newconstructs.com
Office:   615-377-0443
Mobile: 917-513-3377

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About Author

Mike Mayhew is one of the leading experts on the investment research industry. In addition to founding Integrity Research, Mike is on the board of directors of Investorside Research Association, the non-profit trade association for the independent research industry, and a frequent speaker on research industry trends and developments. Mike has over thirty years of research industry experience. Email: Michael.Mayhew@integrity-research.com

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