Explained
Alternative data vs fundamental analysis
Fundamental analysis values a company from its filings: revenue, profit, debt, cash flow. Alternative data is outside activity seen between filings.
| Alternative data | Fundamental analysis | |
|---|---|---|
| What it is | A kind of input | A method of analysis |
| Main sources | Social posts, web traffic, app data, card spend, job ads | 10-K and 10-Q filings, earnings calls, balance sheets |
| Time it covers | Now, often daily | The last reported quarter or year |
| Question it answers | What is happening around the company today? | What is the business worth, on its reported numbers? |
| Main risk | A biased sample read as the whole picture | Numbers that arrive late |
What is the difference between alternative data and fundamental analysis?
One is a kind of data, the other a way of thinking. Fundamental analysis asks what a business earns, owns and owes, and works from the company's reported accounts. Alternative data is a set of inputs from outside the company, and a fundamental analyst can use it: card spend to check a retailer's quarter, job ads to see where a company is hiring.
So the two are not rivals. Alternative data feeds fundamental work; it does not replace the accounts.
Where social attention fits
Social attention, how many people watch and post about a ticker, says almost nothing about what a business is worth. It says how crowded the conversation is. That is useful context for anyone reading the filings, and a poor substitute for reading them.
What about technical analysis?
Technical analysis studies price and volume charts. This site publishes no prices or charts of them, so it has nothing for technical analysis, by design.
The alternative data on this site
Social attention for US stocks and ETFs: StockTwits watchers, sentiment and message volume, Reddit posts naming each ticker, and a daily Hype Score that ranks them. For consumer companies, readings of the brands they own. No prices, forecasts or valuations.
Alternative data for stocksStock Hype Score
Alternative data vs Fundamental analysis: common questions
- Do professional investors use alternative data?
- Yes, widely, mostly paid data sets such as card panels and web traffic, used alongside fundamental work rather than instead of it.
- Can alternative data replace reading a 10-K?
- No. It can add detail between filings; it cannot tell you what a company earns or owes.
Related
Not investment advice. Kovered publishes StockTwits watcher, sentiment and message volume readings and counts of public Reddit posts that name a stock or ETF, plus, for listed consumer companies, readings of the brands they own. It does not publish share prices, forecasts, ratings or recommendations to buy, sell or hold anything. Do your own research. Read the full notice.