Morningstar Joins Samsung Electronics, Dow Jones, AOL Finance on ALY Roster
If major licensing agreements signal future growth, AnalytixInsight ($ALY:CA) is poised for a breakout.
The current volume and velocity of data requires new methods of processing. ALY has developed algorithms which collect financial data and organize it into an ‘actionable narrative’.
On February 10, 2015 ALY announced a new series of revenue sharing agreements between its mobile subsidiary Stockwall and prominent financial content providers, including Morningstar and its mobile subsidiary to ‘Marketwall’.
ALY is adding to an impressive portfolio of partnerships with Samsung Electronics, Miia and NetRange, Wall Street Journal, AOL (Daily Finance) and Dow Jones. The partner companies are disseminating content generated by ALY’s platform. Samsung Electronics is carrying Marketwall as a pre-loaded app in its 200 million new smart devices.
“With these partnerships we are strongly positioned to offer comprehensive financial content to App users and financial services providers,” stated Prakash Hariharan, Chairman of AnalytixInsight, “We continue to strengthen distribution and content, catering to the new generation glued to their mobile devices.”
Morningstar is a global company providing data on approximately 473,000 investment offerings to individual investors, financial advisors, asset managers, and retirement plan providers.
“This is a great opportunity to complement our unique content on global equities and ETFs,” stated Marco Roscio Ricon, CEO of Marketwall, “With additional value added content, we look to offer an innovative user experience which will evolve into product offerings on smartphones, tablets and Smart TVs.”
Morningstar tracks 12 million equities, indexes, futures, options and commodities. Its advisory subsidiaries have approximately $169 billion in assets under advisement or management.
For ALY it’s another major milestone: a monster licensing agreement that confirms the value of its ‘big data’ algorithms which collect financial data and organize it into an ‘actionable narrative’.
“Our platform is set up to provide content,” confirms Hariharan, “We are signing licencing agreements with big players who recognise that our algorithms are capable of delivering a speed and depth of analysis that they do not currently have.”
AnalytixInsight’s ‘technology advantage’ is anchored by proprietary code and its big data analytics platform that chews through oceans of big data, delivering information in a way that a room full of analysts with PHDs can not.
“An example of this would be the real time diagnostics we do on Dividend Quality,” stated Hariharan, “The software examines line-items including Cash Flow From Operations, Payout Ratio, Dividend Yield, and the ability of the company to generate profits to maintain that Payout Ratio.”
Based on the performance of peer companies, the algorithm sets a benchmark, which measures the company’s ability to maintain that dividend. ALY’s software can predict whether that dividend is likely to go up or down.
“Since fund managers buy and sell equities based on these metrics, it is useful information to be getting in real time,” stated Hariharan, “Dividend Quality is only one of 50 or 60 different data points that our algorithms are tracking. The platform effectively performs a 100 billion data computations daily on various line items related company filings and statements”
These licensing and revenue partnerships tap the growing demand for financial data and analysis content across various hardware platforms. ALY generates content on 50,000 equities and over 1,500 ETFs.
ALY has also signed a M.O.I with Iris Business Services to form a strategic partnership exploring opportunities in the financial data analytics space related to XBRL.
Iris is a leading player in the XBRL space and handles filings for several thousand publicly traded companies. There is a growing need to provide value added analytics which can be enabled by AnalytixInsight’s unique big data analytics platform and established distribution channels.
ALY may acquire a 30% stake in Iris, subject to diligence, approval by the respective boards of directors, shareholder and regulatory approvals.
“The Iris partnership is an opportunity to grow in the B2B space,” stated Hariharan, “Iris has approximately $12-million in revenues today and revenues are poised to increase next year. The XBRL space is expected to grow significantly in the next few years on the back of changing regulatory requirements.”
Hariharan believes that the big opportunity for ALY is on the B2B side because content management companies are starved for a mobile solution that can algorithmically generate content.
“B2B applications are looking to big data analytics to provide flow of information, flow of product, flow of content,” confirms Hariharan, “it is our objective to complete licensing deals where there are strong creative and financial synergies”.
This Iris partnership is accretive to AnalytixInsight and will to boost to top-line revenues. Based on current trends and indications, ALY is expected to generate $5- to $6-million in B2B revenues in 2015.
The Morningstar deal confirms ALY’s ability to build Marketwall into a major player in the App space. The $5-6 Million guidance does not include business to consumer revenue, the smaller licensing deals, or the current development pipeline.
Comparable technology companies like Vogogo ($VGO:CA), Slyce ($SLC:CA), Snipp ($SPN:CA) and Spectra7 ($SEV:CA) have lower guidance numbers and market caps 5-10 X higher than AnalytixInsight. Based on these facts, and the major new licensing deals, ALY seems destined to be re-rated to a much higher market cap.
ALY is trading at .35 with a market cap of $11.4 million.
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