Category Archives: Tematica In the News

New Thematic Index Identifies Companies Driving the Clean Living Movement

New Thematic Index Identifies Companies Driving the Clean Living Movement

FOR IMMEDIATE RELEASE: June 25, 2019

CONTACT:
Chris Broussard
(571) 293-1977
cbroussard@tematicarsearch.com


Tematica Research®, LLC, a thematic investment research firm based in the Washington, DC Metro area today announced the launch of the Tematica Research Cleaner Living Index (CLNR). The index is a thematic approach to ESG investing that looks to capture those companies that are riding the tailwinds of Tematica Research’s Cleaner Living investment theme, which focuses on the shifting consumer preference for food, beverages, personal care and beauty items, home cleaning and lifestyle products and services that are deemed to be better for you, your body, your home, workplace and the environment. 
 

What is Cleaner Living

Cleaner Living has moved more and more into the mainstream in recent years as consumers become more conscious of the ingredients and materials used in the foods they eat and the products they surround themselves with on a daily basis. Cleaner Living seeks to eliminate, wherever possible, artificial chemicals, additives and ingredients that are deemed to have potentially harmful effects, as well as avoid the materials or technologies that can damage the planet through pollution or depletion of natural resources. This includes:

  • Cleaner Groceries: Natural, organic, non- GMO and even gluten-free foods, as well as products that specifically avoid using preservatives, artificial sweeteners, saturated fats and artificial chemicals. 
  • Cleaner Dining: Healthier fare restaurants that have adopted a more natural, less processed menu with the elimination of GMO’s, trans-fats, and artificial ingredients.
  • Cleaner Health & Beauty: Natural skincare & makeup, toxin-free toothpastes, shampoos, soaps, feminine hygiene and baby products with more natural ingredients and fewer or no preservatives.
  • Cleaner Homes & Buildings: Cleaning products with more naturally derived active ingredients, free from irritating chemicals, artificial colors and fragrances; low VOC paints, rugs, furniture, and mattresses; products and technology focused on the purification of water and air in your home.
  • Cleaner Planet: Products that have high recycling content or are made through environmentally friendly processes such as sustainable materials. This includes products and technologies designed to use less material and energy to reduce their environmental impact compared to fossil fuels and other petrochemical-based solutions. Examples include biofuels, wind and solar power, electric vehicles, solid-state lighting and other renewables.

Compared to a decade ago, the range of Cleaner Living solutions has expanded significantly. It was not that long ago that in order to find these type of foods and products, consumers had to shop at places such as Whole Foods or your local health food store. Now, shoppers not only find them on the shelv
es of nearly every local grocery store, but Cleaner Living products are now among grocer branded private label products.

As consumers increasingly flock to these cleaner options, many companies have repositioned their offerings to capture this preference evolution in consumer spending.  Christopher Versace, Chief Investment Officer of Tematica Research states, “We are still in the relatively early innings for this thematic shift when it comes to Cleaner Living. Some companies are further along in their transformation than others. But as more consumers seek healthier and environmentally friendly options, we’re seeing an increase in the number of companies looking to accelerate their transformation within the Cleaner Living theme on either a ‘build it’ or ‘buy it’ basis.”  
 

About the Tematica Research Cleaner Living Index

The initial constituent list for the Tematica Research Cleaner Living Index (CLNR) comprises more than 50 companies whose businesses each derive at least 50% of their sales or profits from one or more aspect of Tematica’s Cleaner Living investing theme. In keeping with that theme, the constituents are comprised of companies across several sectors and include food, beverage, and snack, companies; restaurants; health and beauty as well as home care products; and utilities, recycling and auto companies among others.  As more companies shift their businesses to capture the benefits associated with the Cleaner Living tailwind, it means over time there will be new entrants to the index. Given the degree of M&A activity we are witnessing as companies look to hasten that transformation, we are likely to see constituents removed as well. 

In addition to that thematic exposure, the constituents must have a minimum stock price of $10 at the time the index is reconstituted as well as a minimum market cap of $250 million and a minimum average daily trading volume of 100,000 shares over the trailing 30-day period. A company’s thematic exposure to the Cleaner Living theme is captured in Tematica Research’s proprietary Thematic Scorecard. This database of roughly 2,400 stocks has been scored across each of Tematica Research’s 10 investment themes based on each company’s exposure to the theme as reported in publicly available information. 

The Tematica Research Cleaner Living Index (CLNR) is available through Bloomberg, Reuters, FactSet, and other data aggregators, as well as the Tematica Research website and is available for licensing for the use in a variety of exchange traded products or as a data overlay in portfolio screening and management. The Tematica Research Cleaner Living Index is being calculated by Indxx.


Failing Infrastructure Costs Dozens Their Lives in Italy

Failing Infrastructure Costs Dozens Their Lives in Italy

 

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Successful investing requires distancing oneself from emotion and from political biases, letting the data do the talking while attempting to be as objective as possible in assessing the potential risks versus rewards. This week I am failing miserably at this.

This week my second home since 2012, Genoa, Italy, made headlines around the world for the worst of all possible reasons. At least 39 people died because a bridge I have traveled across countless times crumbled. Many of those who were on the bridge fell 150 feet to their death and those below the bridge when it collapsed, I cannot even imagine what they experienced. When I think of what it will be like to see that pile of rubble when I return, I alternate between wanting to throw up and scream at the top of my lungs at those who I hold responsible. This should never have happened. The loss of life was thankfully less than it could have been given that a good portion of the city’s residents had already fled the heat during the August holiday period.

Today politicians in Italy are doing what politicians all over the world do after a tragedy, engaging in a public covering of their own backsides while angrily pronouncing that those at fault will be discovered and held accountable. The same old song as it were.

Here is the situation as I know it, which I am sharing as it helps to understand the challenges with infrastructure investment, something that the U.S. is failing at as well.

The Morandi bridge was completed in 1967 and along with much of the surrounding toll roads, (the route from the A10 onto the A26 and the first part of the A7) is operated by Autostrade per l’Italia which is 88% owned by Atlantia (ATASF:OTC), a company that also manages highways in India, Brazil, and Chile, airports in France and Italy, and jointly controls a Spanish toll-road operator. Atlantia is in turn effectively controlled by the Benetton family, the largest shareholder at over 30% of the outstanding shares through the SPV (Special Purpose Vehicle) Sintonia. An oddity of the Italian markets is that often you will have a publicly traded company’s traded shares represent only a non-controlling stake in the company, with the control remaining in the hands of one or more of the wealthier families. While the shares are publicly traded, investors have no real say in the public entity’s governance.

It turns out that the bridge’s designer, Riccardo Morandi may have been a brilliant architect, but not so great of a civil engineer. This bridge has had problems from the beginning and has required much more maintenance expenditures than is typical. This is where things get ugly. For years and years many qualified engineers have been warning of the bridge’s imminent collapse. It’s operator, Autostrade per l’Italia, has proposed alternatives to reduce stress, meaning traffic, on what was known to be a faulty bridge. All efforts were to no avail.

Enter the awkward coalition between the 5-Star Movement, (Movimento 5 Stelle) and Lega. Two political parties that joined forces to gain a controlling majority in Italy, but whose positions often are at extreme odds. Forza Italia, the Democrats and most importantly Lega have all been in favor of La Gronda. La Gronda is Genovese (Genoa’s regional dialect) for eves, such as you would have on a house. La Gronda was a project that was to connect the port at Voltri directly to the A26. Voltri is the container terminal where those big metal containers you see go to/from ships to/from (mostly) trucks and then get onto the A7. The 5-Star Movement has been vehemently opposed to La Gronda, calling it “La favoletta,” the big fairy tale, with a formal “No Gronda” campaign in 2013. La Gronda was one of the biggest conflicts between the two parties.

Previously policy statements concerning Genoa (Genova in Italian) and La Gronda were on the 5-Star Movement’s website. That was changed quickly immediately following the bridge’s collapse, but thanks to the beauty of the internet being forever, archived versions of those pages can be found. One such copy can be viewed here. There is a lovely video of Beppe Grillo, (the founder of the 5-Star Movement) railing against La Gonda in 2009 on YouTube. The start of this video has a charming little Italian girl carrying one of the “No Gronda” flags. Pretty sure her parents aren’t feeling so great these days. If you enjoy reading from irate Italians, I also recommend searching for #NoGronda on Twitter. Very few nations can do rage quite like Italy. So far Lega is wisely keeping quiet as 5-Star hangs themselves scrambles, yelling and screaming about how they were never really against La Gronda. I’m telling you, this stuff would make Pinocchio squirm.

This week Atlantia (the owner of the operating company for the bridge) is handling the situation so poorly that I’m nearly speechless – not an easy task as anyone who knows me can attest. The press releases on the company’s website as of August 16thought to be an utter embarrassment to the management team and the Benetton family and a business school case study in precisely what not to do when tragedy strikes. Alitalia shares fell 22% in Milan on Thursday, their worst-ever decline. The company has lost around $6.2 billion in market cap since the bridge collapsed. This is likely only going to make the recovery process longer and more painful.

Italy, a nation with the eighth largest economy in the world, has had public spending account for around half of the nation’s GDP over the past decade yet its infrastructure spending has been well below that of its neighbors. Take a look at a topographical map of Italy and one of France, then look at the infrastructure spending of the two. Argh! Italy is pretty much all mountains and valleys so roads are all about bridges and tunnels. France is a pancake in comparison yet they spend more on all those flat roads! Taking into account the percent of GDP that the government spends, clearly this isn’t an issue of a government not having enough funds, the question has been where is it spending?

Infographic: Italy Has Notably Cut Investment In Infrastructure | Statista You will find more infographics at Statista

The challenge is that infrastructure is basically the IT department of government. Rarely does anyone from the C suite walk down to the IT department of a company to say, “Good job, no hackers were successful today and all our tech ran smoothly.” Politicians get reelected by making people happy. Maintenance of existing bridges and roads doesn’t make for great photo ops and is often met with resistance by the electorate – NoGronda!

Think this kind of thing can’t happen in the USA? Think again. In August 2007, the I-35W Mississippi River Bridge in Minneapolis collasped, killing 13 and injuring 45. A decade later, things haven’t improved.

Infographic: Thousands Of American Bridges Are Falling Apart | Statista You will find more infographics at Statista

 

What happened in Italy, yes it did happen here and could happen again.

Infographic: Could The Genoa Disaster Happen In The U.S.? | Statista You will find more infographics at Statista

 

It isn’t just our bridges that are endangering the nation. Our airports, dams, schools, sewer treatment facilities, energy grid, waterways, levees, ports, parks, roads, drinking water, and hazardous waste facilities are all in need of investment with the nation’s infrastructure getting a D+ in 2017 from the American Society of Civil Engineers.

Hopefully, the current administration and/or those in Congress will use this tragedy to focus on America’s infrastructure needs. We’ve heard a lot of talk out of the current Administration about just this, and I hope this serves as a catalyst for the country. A weak infrastructure is a significant headwind to the economy while a modern and robust one becomes a tailwind. This is an area of great opportunity for those in D.C. to do what is necessary, for investors when we see this issue get the attention it deserves, which is the basis for our Rebuilding America index, and for Americans who would reap benefits across many aspects of our lives including less time wasted commuting to and from work or in air travel, less wear and tear on our cars, and lower prices for the things we buy thanks to reduced transportation costs.

Personally, it would be really nice to be able to drive around my other home base in San Diego, California without regularly blowing tires and soaking my car seats with coffee thanks to the ubiquitous craterlike potholes.

 

Apple and Snap Earnings from the Floor of the NYSE

Apple and Snap Earnings from the Floor of the NYSE

 

Apple’s earnings show it’s much more than just an iPhone company, while SNAP continues to operate in a precarious place

On Tuesday May 1, 2018 Tematica Chief Investment Officer Chris Versace joined Hope King and Brad Smith of Cheddar live from the floor of the New York Stock Exchange to break down the most recent earnings announcements from Apple (APPL) and SNAP (SNAP).  Click here to view the full segment . . . 

 

 

 

Fed Interest Rate Face-Off

Fed Interest Rate Face-Off

Before the Federal Reserve’s announcement this week concerning rates, Lenore Hawkins joined The Long and The Short on Cheddar TV to discuss how Wednesday’s decision will impact the market. While the current administration has been looking to keep this economic cycle going much longer and even accelerating, the Federal Reserve is concerned that the cycle may be getting overextended and overheated, putting the central bank in a tough spot as it attempts to apply some interest rate brakes while fiscal policy lays on the accelerator. Click below to watch the video.

 

MODERN WALL STREET: Chris Versace Giving His Insights Prior to Earnings from Apple

MODERN WALL STREET: Chris Versace Giving His Insights Prior to Earnings from Apple

 

Literally from “the street”, Tematica Chief Investment Officer joined Olivia Voznenko of Modern Wall Street from just outside the New York Stock Exchange to discuss what we were looking to see from Apple’s quarterly earnings announcement:

 

As a bonus question, Olivia asked Chris the question we always like to hear: “what industries are you liking right now?”  Always a great opportunity to talk thematics and why we see the how sector investing is dead . . .

 

 

 

The Real Jobs Picture with Lenore Hawkins on Boom Bust

The Real Jobs Picture with Lenore Hawkins on Boom Bust

Earlier this week I spoke with Lindsay France on Boom Bust about the reality of the employment situation in the United States. We keep hearing talk out of DC about how this policy or that is going to ignite the economy, and while we would dearly love to see that happen, we rarely hear anything that addresses the only two factors that truly affect the growth rate of the economy: The growth rate for an economy is the sum of the growth of the labor pool and productivity.

The actual data coming in tells us a lot about the structural headwinds limiting the potential growth rate in the economy. The total available labor pool shrank again in May and has now contracted for four consecutive months by nearly 1 million people: this reduces the potential growth rate for the economy.

Yet, we continue to hear from those in D.C. and the mainstream financial media that the economy is going strong and starting to accelerate to the upside. Errr what? The jobs data tells a very different story. Earlier this month the Bureau of Labor Statistics nonfarm payrolls report for May showed that only 138,000 jobs were added during May, well below expectations for 182,000 and we saw 66,000 removed from the March and April new jobs. Looking at the trend:

  • Average net new jobs added per month over the past 12 months – 189,000
  • Average net new jobs added per month over the past 6 months –  161,000
  • Net new jobs added in May — 138,000

That is not a story of an improving economy.

The recent JOLTS (Job Openings and Labor Turnover Survey) report from the Bureau of Labor Statistics reveals a continuation of a concerning trend that we’ve been watching for quite a few years. The number of job openings hit yet another record high at over 6 million, while hirings continue to lag.  The spread between openings and new hires has also reached a new record high. Even more concerning, the number of new hires has fallen in two out of the past three months, as companies struggle find the right match for their needs. This reduces productivity because when positions remain empty, everyone needs to work around the void, impacting their ability to take care of their own workload, so here we have a hit to both the labor pool and productivity.

From the post-recession lows, the economy has added about 14 million jobs, yet we’ve seen no real wage pressures. This is partly because we have 23 million Americans, (more than the entire population of NY) in the prime working age that are not engaged in the labor pool, which is 25% above the historical average level – that’s some serious deadweight on the economy.

 

 

 

 

 

Tematica Chief Investment Officer Chris Versace Joins Cheddar to Discuss Chipotle’s Comeback Story

Tematica Chief Investment Officer Chris Versace Joins Cheddar to Discuss Chipotle’s Comeback Story

With the Burrito chain’s health scare firmly in the rearview mirror, the question still remains if this Foods with Integrity investment theme company can make the full comeback and overcome a new set of hurdles that sit in front of them.

CLICK HERE TO WATCH (forward to the 38 min mark): http://www.cheddar.com/videos/147086

▶ PreMarket Prep for March 20: Financials slow on Friday’s quad witch close; More order flow Insight by Benzinga’s PreMarket Prep

On today’s show Joel and Dennis talk about how order flow played a part in Friday’s volatile close. Later the hosts discuss the upside for NKE, DIS, and OLED with Chris Versace and get the Nitrous Scan’s read on a few securities with Monday regular Tommy LackeyFeatured guests:Chris Versace, Chief Investment Officer at Tematica Research and Co-Author of the book Cocktail Investing (15:30)Tommy Lackey, Managing Partner and Portfolio Manager at Relativity Capital Advisors (33:18)Listen to PreMarket Prep and chat LIVE with our hosts, guests, and other listeners every weekday morning from 8-9 ET!

Chris Versace joins RT’s BOOM Bust to discuss the Dutch election’s global effect and the Fed Rate increase

Chris Versace joins RT’s BOOM Bust to discuss the Dutch election’s global effect and the Fed Rate increase

Donald Trump announces major cuts to several key departments in America. Voters in the Netherlands re-elect Prime Minister Mark Rutte and the results are being felt around the world, Boom Bust’s Bianca Facchinei has the full story. Chief investment officer at Tematica Research, Chris Versace joins us to discuss larger repercussion by the federal rate hike