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Next Pro Tool: An iPad 'Terminal'


Normally, high-powered analytical tools for investing or trading in stocks moves the institutional and professional markets, toward the individual investor.

From the trader's turret, to the iPhone, you might say.

Now, the pendulum is swinging back, a bit. A long-time developer of computerized means of screening for stocks worth buying or getting rid of is moving a portfolio management tool he build for individuals and the iPhone to the iPad. And targeting institutional customers.

"People reached out to me,'' said Marc Chaikin, founder and chief executive officer of Chaikin Analytics, based in Philadelphia. "And it is an easier space to monetize.''

Chaikin got his start developing proprietary methods of figuring out which way stocks were headed at the now-defunct Drexel Burnham Lambert in 1982. He later refined his means of combining financial results, economic indicators and computer algorithms at Bomar Securities, which he sold to institutional trading network Instinet in 1992. There, he headed up Instinet Research, devoted to quantitative analysis and algorithmic trading. Much of his work ended up in the first real-time analytics workstation for institutional money managers and trading desk, now part of a still-extant Thomson Reuters service to desktop machines.

In 1998, he retired. By 2009, however, "I felt there was one more business in me,'' Chaikin said last week. Thus was born Chaikin Analytics. Its goal: To deliver "proven professional grade stock analytics" on mobile devices.

The first set of Chaikin Analytics came out on the iPhone in March 2011 and was aimed at individual users, looking to download programs from Apple's iTunes Store.

But, he says, he was pushed by professional investors such as Ken Spence, former chief technical analyst for Salomon Brothers, and W. Anthony Hitschler, chief investment officer at Brandywine Global Investment Manager, also in Philadelphia, to begin aiming the product at professional money managers. They needed the kind of real-time analytics and stock screening that he was producing for mobile use.

Chaikin began refocusing the product on four target sets of users: Investment managers, at fund companies such as T. Rowe Price, Invesco or Fidelity Investments; Registered Investment Advisers, with wirehouses such as UBS or Morgan Stanley, the biggest targets; hedge funds and family offices.

The new product was also refashioned for a larger screen, to make its features more visible and useful. The new product, for the Apple iPad and iPad mini tablets was formally rolled out on Tuesday of last week.

That way, an institutional money manager can see in one glance, swipe and second glance how each of the 100 stocks in a portfolio ranks on Chaikin Analytics' flagship Power Gauge rating model.

That model ranks stocks on 20 metrics, from financial measures such as debt to equity ratios and returns on equity to price trends to short interest to earnings consistency to volume trends.

A couple key measures that get broken out to help signal whether to take special interest in a stock are what he calls Money Flow, which tracks whether capital is flowing into or out of the stock, and the Relative Strength of the stock, versus the market as a whole.

The visual service also includes six different pairs of buy and sell alerts, such as the sending of a signal when a "breakout buy" should be made.

In institutional settings, some traders have even begun to put the iPad product on swing arms, so they can view the Chaikin analytical results at any time, in real time, next to their Bloomberg or Thomson Reuters terminals or both.

But Chaikin Analytics is not taking the Bloomberg pricing model with him in getting his tools into the hands of institutions and professional money managers.

Instead of charging a couple thousand dollars a month, he's charging the first 500 customers $150 a month or $1,500 for a full year.

He worries that he might be undercharging, at that rate. But he thinks that, with the low price tag, he can get to 5,000 to 10,000 subscribers in the next three years, satisfying, hopefully, the 40 angel investors that have put $3 million into his effort.

That number, after all, is a small fraction of the 240,000 RIAs operating nationwide. He estimates 95,000 work at the six biggest wealth management houses: UBS, Bank of America, Merrill Lynch, Morgan Stanley, Wells Fargo and JPMorgan Chase.

He says back-testing shows that consistent revising of portfolios based on his screening tools does beat market averages. Think of one screening model as placing stocks, ranked by the Power Gauge, in quadrants by best and worst sector and best and worst stocks.

In that mapping, money managers can see which stocks to move into (the best stocks in the best sectors) and which to rotate out of, also at a glance. Call it a Power Grid.

Each night, the service also generates four-page research reports, based on its metrics, for the 5,000 most-liquid stocks, in PDF format. Included in the report: Potential swaps of stocks with bearish prospects for those with bullish futures.

This will become a real-time reporting system, as well, Chaikin said. Punch a symbol. Get the (fully updated) report.

What the iPad approach does is give users "instantaneous review of portfolios" with "all actionable intelligence," in his view.


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