NEW YORK, Jan. 13 /PRNewswire/ -- After six years of research and development, OCE Interactive, comprising a team of former bulge-bracket investment bankers and Wall Street executives, has launched a new, Web-based platform for benchmarking and valuation analysis of U.S. stocks called Market Topographer™ (www.markettopographer.com). Designed to help investors and advisors navigate all types of markets, including today's post-financial crisis stock market, the platform demonstrates how the market is systematically rewarding and penalizing company valuations at any point in time. It features patent-pending tools that enable users to evaluate more clearly and objectively whether or not a stock is fairly priced.
Market Topographer combines fundamental and behavioral analysis, with a particularly strong focus on evaluation of each company's relative risk profile, trading multiple and whether or not the expectations embedded in its stock price are achievable. Under the hood, the platform is driven by a financial model back-filled for 20 years and encompassing 12 core risk assessment characteristics – such as financial leverage, dividend payout ratio and growth expectations – which together define how the market views the general valuation risk of an investment in each listed stock as of any given day. For example, if one company relies on greater financial leverage than another to achieve the same projected earnings profile, it should trade at a lower price.
Market Topographer's interactive tool sets offer users three complementary benchmarking techniques to gain a comprehensive perspective on the valuation of any particular stock:
- Evaluation of the reasonableness of future expectations priced into a stock.
- Evaluation of the impact of market conditions on a stock's price.
- Direct comparison of the risk profile and valuation of a stock with other stocks (currently, historically, and even across time).
Founded in 2003, OCE Interactive has devoted more than six years to the research and development of Market Topographer's underlying technology, for which the company currently has six comprehensive patents pending. According to President and Chief Executive Officer Jonathan Greenberg, CFA, he and his fellow OCE co-founders, Michael Lockitch, CFA, and Andrew Schmolka, created Market Topographer to address problems that have long undermined practitioners' efforts to make objective comparisons of stock investment alternatives. These stem from the differences in profile between even the most directly comparable companies and the impact of changing market conditions.
"During our careers on Wall Street, we've found that valuations are often highly subjective and inconsistent with the valuation of other companies currently trading in the marketplace, as well as historical precedents. This makes it challenging to determine the true, objective value of a company, especially in a volatile market," said Greenberg, a former Salomon and Lehman banker. "Market Topographer helps investors and advisors to see more clearly how and why the market is pricing a stock at a given level, relative to other companies and relevant historical precedents."
"We built Market Topographer to provide a framework that would help investors do a better job connecting the dots between the valuations of companies, both currently and across time, and between the current expectations priced into stocks and the market's record of historical fundamental precedents to support those expectations," he said. "Market Topographer transforms commoditized financial data that is widely available from a variety of sources into insightful information. Amidst today's market uncertainty in the wake of the financial crisis, our goal is to provide fresh insights that will help investors make better informed, safer investment decisions and improve their bottom-line performance."
The initial release of Market Topographer features two patent-pending modules, Breakdown and Based on Experience. Breakdown enables you to compare and contrast head-to-head the risk and fundamental profiles of practically any two publicly traded U.S. stocks and evaluate what is driving their relative valuations, both currently and across time. It allows you to assess whether risk is being appropriately priced for a particular stock relative to other stock investment alternatives. For any two selected companies, Breakdown identifies their relative exposure to each risk assessment factor, qualifying each as a relative valuation "pro" or "con" and ranking them all based on the magnitude of their impacts given how the market is rewarding or penalizing each at any point in time. Based on this analysis, it may become apparent for example, that a company trading at 15 times earnings is actually cheaper than a company trading at 8 times.
Based on Experience serves two complementary purposes. First, it provides a valuable means to assess the reasonableness of the expectations priced into a stock today, based on comparisons with the historical record of fundamental achievements of a broad selection of relevant companies over time. Second, it demonstrates how stocks with a risk and fundamental profile similar to any given stock today would have been priced historically. If the current price of a stock is below the average of these historically implied prices, for example, it may be an indication that it is a good time to buy. Together, these approaches allow you to evaluate the reasonableness of the two major assumptions that drive a stock's trading multiple and therefore its valuation: long term growth expectations and the multiple the market is willing to pay for that expected growth at a given point in time.
Market Topographer is designed for investors and advisors at all levels of sophistication. "Portfolio managers, research analysts, investment bankers, financial advisors, corporate finance executives and even more sophisticated or inquisitive retail investors will find the platform very useful," Greenberg said.
About OCE Interactive
OCE Interactive is the developer of Market Topographer™ (www.markettopographer.com), a new platform for benchmarking and valuation analysis of U.S. stocks. Market Topographer combines fundamental and behavioral analysis to help investors and advisors evaluate, in an objective and market-consistent way, whether a stock is reasonably priced, with a particularly strong focus on assessments of the company's relative risk profile and whether the expectations embedded in its stock price are achievable. OCE was founded in 2003 by a team of former bulge-bracket investment bankers and Wall Street executives, who spent more than six years developing the Market Topographer platform. Currently, the company has six patents pending on its technology and an extensive pipeline of additional tools for equity valuation and mergers and acquisitions practitioners. The company is based in New York.
SOURCE OCE Interactive