Voyant Advisors

Voyant Advisors publishes two subscription-based research services. Voyant Americas has been published since 2007 and focuses on North American listed companies with an emphasis on the U.S.  Voyant Europe began publishing in 2008 and focuses on companies listed in the UK, Western Europe, and Scandinavia.  In addition to three new short recommendations each month, the service also publishes time-sensitive updates on thesis-impacting events such as earnings releases, management presentations, company announcements and regulatory-related activity (i.e., informal SEC inquiries).

The companies covered by Voyant are liquid (> $15M average daily volume), with low short interest (< 15% of float) at initiation. While coverage is sector-agnostic, the service focuses on companies in the technology, industrial, materials, consumer, and healthcare sectors. Healthcare coverage is focused on medical devices and services.

Investment ideas are generated through a three-stage research process blending qualitative, fundamental research with expertise in forensic accounting.

The first stage involves a measurement of working capital and asset account quality across a wide universe of companies with market capitalizations exceeding $1 billion. We measure sector-specific variables of working capital account quality in four broad areas – revenue, inventory, capitalization, and earnings quality. This initial screening process results in a subset of companies exhibiting characteristics that are consistent with unsustainable revenue and/or earnings.

The second stage of the research process investigates earnings manipulation and accounting policy changes implemented by management to achieve or exceed consensus estimates. Our fundamental analysis focuses on areas of business deterioration that are likely responsible for the disparity between current Street estimates and the actual earnings power of the company.  This part of our research process also includes calls to customers, suppliers, and competitors in order to gather additional clarity on key business drivers and competitive challenges faced by the company.  We’ll also examine company disclosures, risk factor language, prior correspondence with the SEC and internal control weaknesses such as inventory valuation systems, auditor changes and poor accounting practices.

Lastly, we examine motivational factors such as executive turnover, insider transactions, and compensation structures that can be manipulated to benefit management.

Our short theses often materialize through a negative earnings pre-announcement, an earnings and/or revenue miss, negative guidance revision, financial restatement, or some other material adverse event such as an SEC enforcement action.

We provide continuous coverage of each company until our thesis either materializes or has proven to be incorrect.  All clients are provided with unlimited access to the analyst team, and online access to an archive of previously published research reports.