Umair Haque is an on-line strategist - we are big fans of his work. His latest column on the Harvard Business Blog focuses on finance. It is written as a letter to Google ($GOOG). In it he asks if they can build a better global financial architecture. It is his usual great stuff. At the end of the piece he lists three examples of companies on the “leading edge of a revolution“. One of the three examples that he uses is Valuecruncher.

Tracked, ValueCruncher, StockTwits, and many more are the leading edge of a revolution — a revolution in what finance has been for the last several centuries, and what it must become in the 21st.

That is really cool.

We have previously looked at a view of the future of on-line finance. In that analysis we looked a range of scenarios:

One of the scenarios being Rock Stars.  We described the Rock Star scenario as:

Rock Stars – Retail investors seek advice from communities of other investors and are willing to pay. Investors make their trading accounts transparent on-line. Successful investors open their accounts to act as virtual fund managers. Virtual fund managers and community owners split a management fee paid by investors. Winners – Covestor, KaChing.

Last week Dan Carroll and the team at KaChing announced their new offering - and started to show how this scenario may play out. There was a feature in the NY Times which described the business model.

Customers will be able to open a brokerage account with Interactive Brokers and link their account with their choice of investors on KaChing. KaChing charges customers a single management fee of 0.25 percent to 3 percent, set by each investor. KaChing keeps a quarter of the fee, and the investors get the rest.

Each time the investors make a trade, KaChing will automatically make the same trades for the customer. Customers can log on whenever they want to check their portfolio’s performance. They can send the investor private messages and receive alerts if the investor does something unusual. With the click of a mouse, customers can stop mirroring an investor.

KaChing has an A-list team of investors behind them. The on-line finance space has a lot of interesting experiments going on - but we think this is a particularly interesting one. A lot of us will be watching closely how KaChing goes.

Disclosure: I met Dan and Jonathan from KaChing at the FinovateStartup09 event in San Francisco in April 2009. We had the stand next door. Good guys, smart guys - doing interesting things.

Valuecruncher CEO Mark Clare will be in the United States for the next two weeks. He will be based in San Francisco from the 21 September to the 26 September. He will then be in New York from 27 September to the 2 October.

Mark will be at the Finovate conference in New York on the 29 September and also attending the StockTwits StockCamp event at NASDAQ on the 2 October.

You can follow Mark on Twitter - @Valuecruncher.

We have added some new major new functionality to the Valuecruncher site.

The first thing you will notice is that we have added a lot more companies to our dataset.  We now have 8,000+ companies on the site.

The second thing you will notice is that we have added an interactive comparator (or multiple) based valuation tool to the site.  This new interactive comparator tool allows you to complete valuation analysis of a company against a peer group across a range of changeable metrics.

As an example here is the Interactive Comparator Valuation Tool for Google ($GOOG).

We have previously written about using comparator company valuations - also called comparable company valuations. We will complete a step-by-step guide to using the tools shortly - but the Valuecruncher newsletter noted above gives a good overview to the broad concepts.

We will soon be adding the capability to change the peer group of companies. Currently the peer group is set by an algorithm and can not be changed.

Discounted cash flow (DCF) valuations are not available for all the companies in the dataset. This is because of data limitations and the relevance of the three-year DCF format for certain industries. Where they are available they are on a tab on the company page.

We are excited to bring you this new interactive comparator valuation tool.  We are still working through the kinks - so there are still some rough edges. We are working through those.  But we hope this tool makes more valuation analysis accessible to a wider group of people.

In late April Valuecruncher was one of the companies that presented at the FinovateStartup09 conference in San Francisco. It was a great event and showcased some interesting companies in the finance space.

There are videos of all the presenting companies up on the Finovate site. This includes one for Valuecruncher.

Enjoy.

Valuecruncher was at FinovateStartup09 this week in San Francisco.

It was a great event for Valuecruncher.  We met some really interesting people and got to show off what we are doing to a smart connected crowd. We recorded a formal video there which we will link to when it is up on the Finovate site.  But here are some other links and thoughts for now:

Banktastic were providing coverage of the conference and they captured Mark Clare giving a demo of the Valuecruncher service to an attendee.

Mark Clare spent some time talking to Larry Chiang from BusinessWeek.  Larry asked what were the three things he learned at Finovate that he did not learn at business school (the name of his column).  Here is his three - enjoy:

1. To be a successful personal finance management (PFM in the lingo) site you need to have grass on your home page – examples Mint and Rudder (HT: LendingKarma).
2. Speaking of LendingKarma. Even without the MBA I know that LendingKarma and CreditKarma (both participants at FinovateStartup09) should merge for the name synergies alone.
3. That there are sure are a lot of you “English” guys around.  I am from New Zealand.  Literally the other side of the world.

Update: these links are currently down.  We hope to have them back up as soon as possible. 

NZX is the New Zealand stock exchange.  Today NZX placed links to Valuecruncher valuations for the NZX 50 on their website NZX.com.

NZX Summary Page For Telecom New Zealand ($TEL.NZ)

At Valuecruncher we believe research is important for retail investors participating in equity markets.  Retail investors are looking for recommendations and guidance in making investments.  Valuecruncher is very pleased to be making our interactive analyst reports available to a wider audience through our partnership with NZX.

Next week Valuecruncher will be at the FinovateStartup09 event in San Francisco.  Valuecruncher is one of the participating companies.  Valuecruncher is excited to be part of the event.

Mark Clare from Valuecruncher will be in the Bay Area the week of 27 April to 1 May.  He is then going to be in LA (4-5 May) and New York (6-8 May) the following week.

Mark can be contacted at mark.clare@valuecruncher.com.

Today we have launched a new homepage for Valuecruncher.  This is all about our new interactive analyst report offering.

Valuecruncher has interactive analyst reports for 745 companies in the S&P500 (US), FTSE350 (UK), TSX Composite (Canada), ASX200 (Australia) and NZX50 (NZ).

The new homepage makes it easy for you to search for companies that you are interested in or to simply look for companies we think are a buy or a sell.  Our interactive analyst reports are based on a discounted cash flow valuation approach.  You can modify our assumptions and the valuation will be updated automatically. You can also save and share your valuation.

We continue to work out the kinks.  We would love to hear your thoughts.

We have been a little quiet over the last couple of weeks with the blog posts here at Valuecruncher.  We have been working on a new release of our service.  We are now ready to start showing people what direction we are headed.  We have put the new content/format up on the site.  We are still working through some kinks and there will be a new home page up in the next week.

So what is it all about?

The analogy we have used in describing the Valuecruncher offering is painting.  Our offering to date has been the equivalent of providing valuation tools up to the level of a line drawing, where it is then up to the user to complete the painting (valuation).  Users have asked us to take our offering further - to complete the painting and let people play with the finished piece.  That is the key thing we have implemented.  We have also added some additional features to make an interactive analyst report available to users.

Valuecruncher is now providing independent equity research for a range of companies in the S&P500 (US), TSX Composite (Canada), FTSE350 (UK), ASX200 (Australia) and NZX50 (New Zealand).  We are providing a recommendation on these companies.  Independent equity research is important for properly functioning equity markets.  We believe investors (especially retail investors) are looking for independent advice on making investment decisions - especially in times of uncertainty.  Globally the providers of equity research - investment banks, brokerage firms and independent research firms - have been reducing their output.  We are aiming to fill this gap.  Not only to fill the gap - but to make the analysis more interactive.  Letting users play with the assumptions within the valuations.

Here are the key four parts of the new offering.

Recommendation

Valuecruncher provides a recommendation on each company in our data-set.  If our current valuation is above the current share price we say “Buy” - if it is below we say “Sell”.  We have a “Margin of Safety” feature that allows users to determine a contingency they build into the valuations.

Discounted Cash Flow (DCF) Valuation Model

The DCF corporate finance valuation model is the basis of our valuation.  Valuecruncher makes our model transparent and interactive.  Users can change the assumptions and the valuation and recommendation change.  Our assumption numbers are based on consensus analyst estimates.  Sites like Reuters.com provide a resource for users to check our assumptions for key numbers like revenues and profitability.

Comparison Analysis

Valuecruncher has added comparison analysis to our reports.  This analysis looks at how the markets are valuing a company and a peer group based on a range of key financial metrics.  Currently the range of metrics that we measure are limited - we are aiming to extend this.  The peer group of companies is currently determined by an algorithm.  Moving forward we will aim to improve this algorithm and eventually add some user-choice elements.

Sensitivity Matrix

This matrix shows the impact on the DCF valuation of changes in two of the key inputs the discount rate and the terminal growth rate.  This matrix isn’t yet dynamic based on changes to the DCF assumptions.  Currently it is driven off the starting valuation numbers.

This release of the interactive analyst report is significant for the team here at Valuecruncher.  We have released the latest version as early as possible.  There will be kinks and gaps over the near term.  We are looking for feedback.

Presently the offering is free with full (current) functionality.  This will remain for the next few months.  However - moving forward we are anticipating moving some functionality to a subscription service.  Valuecruncher will provide plenty of notice about any changes to the service.  The lawyers have also insisted on us highlighting the expanded terms and conditions and disclosures.

A very talented group of people have worked hard to bring this new release out.  Valuecruncher is very grateful to the core team of JD, Rowan, Jeremy, Sam, Brent and Lance that have all contributed to making this happen.

We hope that you find this useful.