FINIF - Sentiment Analysis

[FINIF]

FINIF || Financial Informatics

FINIF uses proprietary natural language processing and quantitative technologies to analyze company SEC filings and other financial data. We specialize in an emerging technology known as sentiment analysis, or assessing the "tone" of company reports.

We use categorical word lists developed by Bill McDonald and Tim Loughran of the University of Notre Dame. Words are parsed and put into categories such as negative, positive, litigious, uncertainty, modal strong, and modal weak.

Sentiment analysis reports are automatically generated that compare a company's latest report to the previous report and the market averages. We also provide a 1-10 scale based score for the 4-Day and 1-Year abnormal returns.

We also analyze reports with "Going Concern" qualifications. Kausar, Taffler, and Tan (Journal of Accounting Research 2009) document a significant price decline on the filing date for 10-K/Q's containing a Going Concern qualification and a downward drift of -14% over the subsequent year.

I will post daily the top rated reports and details, along with any reports that I may find interesting or deserve to be mentioned.

If you have any questions about sentiment analysis in general, or would like to see a specific company looked at, please post in the thread and I'll do my best to keep this updated.

[FINIF]

Today is Sunday so there are no 10-K / 10-Q reports being filed, but being the first post, I'll look back at a few interesting reports from this week.

ADOBE SYSTEMS filed a 10-Q this Thursday and the latest report isn't looking to good. *With almost an entire percent increase in the proportions of negative words in the filing, it looks like Adobe is having a little trouble this quarter. *It probably doesn't help with Apple refusing to support flash *Here's the full report (May take a while to load... It's a large image)



A look at the Yahoo chart seems to exemplify the negative sentiment of the report with a steep drop but it looks like it pulled back on Friday.


*

SONIC CORP filed a 10-Q as well this Thursday, with the sentiment of their report looking a little brighter.



I also wanted to include a report with a "Going Concern" qualification and the first one that popped up ironically happened to be a bank.

CRESCENT BANKING CO filed their 10-K April 1st and the combination of low FINIF scores and a "Going Concern" doesn't look good for them.




Here's a Yahoo finance chart for Crescent and sure enough it seems to have taken a dive right around April 1st, and only time will tell if the "Going Concern" in the report will lead to a downward drift.

[FINIF]

LEVI STRAUSS & CO filed a 10-Q today, and it had one of the top FINIF scores of the day.



I'll post a chart tomorrow to see if this report had a positive outcome like the tone of it.

[FINIF]

CHEROKEE INC (CHKE) filed a 10-K early this morning. I don't have access to photoshop the report, but here is the word proportions table

Word Distributions Current Prior Market
Negative 1.193 % N/A 1.693%
Positive 0.688 % N/A 0.806%
Litigious 0.770 % N/A 0.995%
Uncertainty 1.193 % N/A 1.428%
Strong Modal 0.393 % N/A 0.258%
Weak Modal 0.423 % N/A 0.562%

With much less negative words in the report compared to the market, this stock looks like one to be watched. It has really started to skyrocket within the past 24 hours and is very promising.

[Don.Nettrader]

Sorry you gave up on the daily reports. Sentiment readings are some of the most powerful ways to manage risk and be on the right side of the trade.

Where's the sad smilie?

[FINIF]

I would've really liked to have kept the posts coming, but I have been really busy with turning this idea into a company.

If you would like to follow what I'm doing with sentiment analysis take a look at finif.com - I analyze all sorts of market chatter such as 10-K/Q's, news, headlines, tweets, etc and provide aggregate reports that combine all this information.