It is fascinating stuff to an old option trader. Mostly because it helps monitor the flow and velocity of all market participants. Thank you web 2.0.
To that end my growing company, Aqumin, has created a TweetScore (High TweetScore in Blue and Green, low in red, sorted by Stock Volume) to combine what is Twittered about with real-time information. For me I call this a leading (contra) indicator. Not perfect, but a great source of ideas.
What I like about AlphaVision is I can take a Tweet and find the other trade. For instance look at Amazon (AMZN) which produces a very high TweetScore. Everyone is talking about it and it is a great company but it trades at a crazy multiple (50+P/E). I have seen enough to know that the new buzzwords “cloud computing” (used to be Railroads, Internet, Biotech, Xerox….etc) scare me with these kinds of names. Not that AMZN cannot go higher but give me something else to buy. So I use AlphaVision to find something in the same sector. Netflix (NFLX) pops up but that is no bargain either in the single digit P/E world. But Ebay (EBAY) sticks out. The market hates it (underperformed the S&P 500 of the last 52 Weeks) and trades like a utility (10 P/E).
What is unique about AlphaVision is that it compares names and not just screens them. The whole world is looking a spreadsheet of screens. What the market participant needs now is a way of looking at multiple names, in real time with all transaction data, at one time. Let everyone else screen, with AlphaVision you can compare across multiple sectors and price feeds with various types of data. Now is the time to do something different.
Take a look at Net Margins over the trailing 12 months (TTM). Ebay is 4x as efficient but trades at 1/5 the multiple. With AV this makes the trade much easier.
That is how eBay (EBAY) popped up. No Tweets love it. But it is standing right next to Amazon (AMZN) and that is where the opportunity lies. Buy what everyone else wants (which is good for now) or buy one of the best monopolies on the web for the price of your electricity provider and get Skype in the process.
I am buying eBay (EBAY) tomorrow and holding it until they make big money on Skype. Amazon (AMZN), good company, but it does not have a history of defying gravity forever.
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