Investment research teams use data to form and test theses about companies, sectors and the economy before the numbers appear in reported results. Alternative data is now a standard input alongside filings and fundamentals.
Alternative data covers signals such as card spend, web and app engagement, hiring, foot traffic and satellite observations, mapped to tickers. Card transaction data is widely used to estimate consumer-facing revenue between reporting dates. Company fundamentals provide the reported financials that every signal is ultimately compared against.
A typical workflow
- Start from a question, such as whether a retailer's quarter is tracking ahead of consensus.
- Find datasets that plausibly lead the reported metric.
- Test the historical relationship between signal and outcome.
- Monitor the signal and document how it feeds your view.
What to check before you buy
Ask about panel size and stability, how tickers and brands are mapped, how far back history goes and whether it is point-in-time. Compliance will want to confirm that the data contains no material non-public information or personal data, and that the provider can complete a standard due diligence questionnaire.