With academic studies validating the alpha in single-stock event calendar data services, industry veteran Bruce Fador is taking on a larger role at Wall Street Horizon, a firm that he cofounded.
Last Friday, the Woburn, Mass. provider of calendar data services for institutional investors and traders announced the appointment of Fador as president and chief commercial office.
Fador co-founded the company together with Barry Star, managing director in 2003, and has served as an executive advisory board member since 2013. The company has developed a business around collecting event data sets related to earnings release dates, dividends, board meetings, and conference calls.
"It's a very event-focused data set," comments Fador, who brings 25 years of experience in financial services technology having served as CEO of Thomson First Call, First Call, WorldStreet Corporation, Weiss Ratings (sold to Street.com) and Financial Research Corporation. Recently Fador has provided consulting and strategic alliances for companies like Kuberre Systems, Recognia, and Morningstar.
"The whole idea is there is volatility around these dates, and if you are an active trader or investor, you want to trade around these events, either to increase a position or get out of a position," says Fador.
One big differentiator for Wall Street Horizon is the accuracy of the data, says Fador.
The current client base, which consists of active traders or options traders, relies on the accuracy of the event dates. Another segment that is growing includes quants and quant managers.
When Wall Street Horizon gathers the data, they timestamp it down to the minute and in some cases, down to second it was created, he suggests.
To validate the way clients make money around its data, Wall Street Horizon has made its data available to academics. Josh Livnat, director of research at Quantitative Management Associates LLC, who is adjunct professor at New York University, and Assistant Professor Li Zhang, Rutgers Business School, released "Is There News in the Timing of Earnings Announcements?" did a study that found there is alpha and found there is alpha the earnings release dates.
A second study, "Timing Will Tell: Information in the Timing of Scheduled Earnings," was published on October 14, 2014, by Eric So, assistant professor of accounting at Massachusetts Institute of Technology - Sloan School of Management, also focused on the information in scheduled future earnings announcements. So stated in the abstract:
Firms that significantly advance their announcement subsequently report better earnings news relative to firms that delay, consistent with firms strategically timing news. Advancers also outperform delayers by 260 basis points in the month after calendar revisions, where returns are concentrated during earnings announcements and mirror the nature of earnings news. Together, the results indicate investors fail to unravel information embedded in the timing of scheduled news releases.
The point is that these dates tend to move around -- companies will bring it forward sometimes or delay announcements, says Fador. Academic studies have generally found that companies that move forward the date perform better, than those that delay the announcement. "If a date is delayed it generally means be prepared for bad news and those dates have volatility around them," says Fador. "What looks to be a simple data set is more complicated than that and tracking those changes is critical," he adds.
In addition to forward looking event calendar dates, traders and investors also want access to history. They like to recreate history and they can go back and look at the data with granularity, says Fador.
While many data companies have calendar of event dates, Fador says the company has evolved well beyond a calendar and is known for its accuracy. "If you're a trader, you can't trade on bad data. You need the most accurate data," he said. Even those who work at rivals such as Thomson, FactSet, or a Bloomberg subscribe to their data, he says.
Wall Street Horizon's business has been growing 20% to 25% year-over-year, says Fador, calling it successful, growing and profitable. "And where the future lies is to expand the branding and awareness of Wall Street Horizon," says Fador, who is rejoining the firm to focus on sales, marketing and business development.
"Here I want to speak the language of clients; how our data can be utilized; how it can be modeled, and ultimately, how it can be valued and how it can be used for your investing advantage."
Over a 12-year period, Star has evolved the operation into a combination of high-tech and and high-tech data sourcing. The firm has a team of data analysts in the US that run QA and have developed automated methods for getting the data. Though these dates are public on websites, "You need to now where to look for it," says Fador. That expertise gives us the leg up on others, he adds.
In a statement Star comments, "Bruce is deeply rooted in the company as well as widely recognized as a leader in the financial industry who has successfully helped grow businesses. As we look to expand, I am pleased to have him lead several large scale initiatives in 2015."
One new initiative could be expanding the data set to appeal to the fixed income market. Fador said the data set should appeal to the broader equity market and that he's also planning to sell across equity and fixed income. "There are plenty of dates that happen in equities that would have an effect on bonds," says Fador, who is considering an expansion of the data set.Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio