Strategy Builder
Easily develop alpha-generating equity trading strategies
Valspresso’s Artificial Intelligence (AI) investment technology has been used to build strategies and manage model portfolios and clients’ money since 2013. Valspresso’s AI analyzes all publicly traded companies on the U.S. major exchanges. This automated analysis includes deep fundamental analysis as well as a patented price sentiment analysis. Alpha is delivered through a combination of stock selection, dynamic tactical allocation, and automation. Valspresso has developed a series of model portfolios (baseline templates) that have been backtested through multiple market conditions from 2004 to 2018. Based on the success of those portfolios, Valspresso is making available to its subscribers the models’ Trade Signals. The Trade Signals are made available to subscribers via FactSet for a zero AUM fee, subscription pricing model.
Fundamental Analysis
Every day, Valspresso’s software performs deep financial statement analysis of publicly-traded U.S. companies based on 3 simple, but fundamental, questions:
- 1. Is the company profitable from its business?
- 2. Can the company pay its bills from cash on hand?
- 3. Is the company structured to reward investors?
Each of the above questions are answered daily by programmatically inspecting each public company’s financial statements filed with the Securities and Exchange Commission (SEC). These include filings such as 10-K, 10-Q, & 8-K. Because financial statements tell a complicated and nuanced story, the expert system rules look at other information on the financial statements to cross check those top-level values to compose a holistic understanding of the health of the company. The 3 simple questions underpin the long-term success of ANY business. Regardless of the size of the company or the industry sector in which they operate, those 3 simple questions are relevant. The 3 simple questions are applied uniformly to all companies in all sectors across all market conditions.
Price Sentiment Analysis
Implicit in the price that investors pay for a stock at points in time is a forecast of a company’s future operating performance (earnings). Valspresso’s data-driven patented method calls this forecast Market Sentiment (or Market Expectation). Every day, the system performs programmatic Sentiment Analysis of all companies and classifies them as Optimistic (High Expectation of future earnings growth) or Pessimistic (Low Expectation of future earnings growth. By analyzing actual earnings and other data points, the system determines, at points in time, whether companies are meeting high expectations or beating low expectations.
Automated Tactical Asset Allocation
In addition to stock selection, the strategy seeks to provide downside protection by tactically moving the strategy’s portfolio holdings from stocks to cash. Tactical moves to cash occurs during periods when certain quantitative market indicators signal that market volatility (downside risk) is high or is likely to increase. Conversely, the strategy moves its portfolio’s holdings back to stocks when indicators determine that market volatility is likely to be low or appears to be decreasing.