NEW YORK: Brand consultancy CoreBrand has entered into a deal with The Bank of New York to distribute stock research that uses brand reputation as one of the criteria for investment recommendations. The research will be available via BNY Jaywalk, Bank of New York's independent research arm.
CoreBrand says it knows of no other firm producing stock research that integrates corporate brand strength in its recommendations. Yet the firm says investors should understand the importance of brand equity as it relates to stock market valuation.
"Our research has proven that corporate brand is responsible for up to 20% of a company's total market capitalization," said CoreBrand CEO Jim Gregory. "For many large companies, that percentage translates into a startlingly large multibillion dollar number that cannot be ignored by CEOs, CFOs, investors, and analysts."
CoreBrand's "Outlook" reports will issue weekly "buy," "sell," and "hold" recommendations for 500 publicly traded companies based on a quantitative stock-picking model.
Quantitative stock analysis attempts to value a company's shares by measuring several numerical statistics in a formulaic way that eliminates most elements of human judgment.
"We take the emotional issues and try to look at these companies from a very critical point of view," said Gregory.
CoreBrand's formula uses five criteria: The company's brand-image ranking as determined by CoreBrand; the S&P 500 closing price each week; the median price-to-earnings ratio of 1,700 stocks; the yield on the 10-year Treasury note; and the price of oil.
CoreBrand says it has used this model for an in-house portfolio, which it claims is up over 100% since its inception in 1999.