NEW YORK-based broker Auerbach Grayson & Company, Inc., which specializes in providing global trade execution and research to leading US institutional investors, is providing its clients with a huge global library of equity research reports in eXtensible Business Reporting Language (XBRL) format.
The new offering, which the brokerage is offering at no charge to its clients, is powered by XBRL technology developed by SavaNet LLC, headed by former sell-side analyst and hedge fund portfolio manager Eric Linder, CFA.
The XBRL-enabled research report library allows the brokerage firm’s clients — including some of the biggest US institutional investors — to search, analyze and directly compare financial research from around the world in unprecedented detail.
10,000 sell-side research reports from 50 countries
The information in each research report is tagged using hundreds of elements from a special taxonomy developed by SavaNet. This allows for direct line-by-line comparability between research reports from different providers. Auerbach Grayson’s Interactive Global Express Research library currently has more than 10,000 XBRL reports from over 50 countries. New reports are being converted from PDF into XBRL daily.
|Auerbach Grayson advertises its new library of 10,000 XBRL-enabled international research reports on its website yesterday. The firm’s institutional investor clients can access the database at no charge.|
“The new XBRL format allows the buy-side to focus on investment analysis rather than spending time hunting through static PDF documents line-by-line for information, which needs to be manually standardized, updated, and entered into their investment models,” the companies said in a joint statement yesterday.
Real-world experience of XBRL’s power could ignite investor demand
I think this development is interesting because it is developed by investors for investors. It also means that influential buy-side analysts and portfolio managers will soon gain real-world experience of the enormous power of XBRL. That could spark heightened demand from investors for other data in the format and potentially lead to sell-side and independent analysts publishing their research in XBRL.
While the US Securities and Exchange Commission (SEC) has proposed mandating XBRL for corporate filings on a very conservative staged basis over the next three years, to date there has been little demand or evident interest in XBRL data from The Street. This presumably is because analysts and investors are mostly unaware or unconvinced of the technology’s benefits.
However, that could change once analysts and portfolio managers start gaining access to advanced XBRL data applications and resources such as that now being provided by Auerbach Grayson and SavaNet.
Why sell-side reports?
Yesterday, I asked SavaNet’s CEO Linder, who worked on the SEC-funded US GAAP taxonomy project, why the buy-side would want to access sell-side research reports in XBRL rather than directly obtain companies’ financial reports in XBRL. He said SEC filings in XBRL are unlikely to live up to investors’ expectations.
He said there would likely be problems with the comparability of company XBRL data in SEC filings due to the fact that companies will have the freedom to create their own data tags or extensions.
|A screenshot from Auerbach Grayson’s XBRL-enabled research report library viewed in SavaNet’s XBRL Analyst software.|
He also said that investors, the end users of XBRL data, have not been well represented in the many XBRL initiatives to date. This has led to the technology being driven from the perspective of the accounting profession and the enterprise software community rather than by the needs of investors.
Furthermore, XBRL would not lessen the need for impartial, expert analysis, so investors will likely continue to want information and data that has been prepared specifically for them by analysts.
Auerbach Grayson institutional investor clients can access the XBRL research reports via email, on the broker’s website, or in SavaNet’s XBRL Analyst software. In addition to accessing extensive comparable financial tables and charts, investors can export complete financial statement forecasts to Excel in either “as reported” or in SavaNet’s comprehensive standardized format.
Analysts can also use add-on XBRL tools to publish their own forecasts from Excel models into XBRL to compare in-house forecasts with external analyst estimates.
“The investment Auerbach Grayson has made in XBRL reporting on the behalf of its clients provides them with an infinitely better industry standard for research reports than the current PDF format, which has become outdated and grossly inefficient. SavaNet’s adaptation of XBRL for institutional equity research community releases the full potential of this flexible format by providing the necessary standardization in conjunction with individual report customization,” said Linder.