SPLK: Surprise CEO Resignation

Investors got a nasty surprise last week when President & CEO Doug Merritt (58) resigned suddenly and with minimum explanation. Chairman Graham Smith (62) is serving as Interim CEO while the Board conducts a formal search for Merritt’s replacement. We think Smith is a solid interim CEO and unusually well qualified to keep the firm’s transition to a Cloud subscription model on track, having executed on similar models as a CFO in his prior life. He has been on the Board for 10 years and is the former CFO at Salesforce.com and before that, Advent Software. The big data tech stock is down roughly 26% YTD and approaching its trailing two year lows and we wonder if the awkward leadership change might result in putting the Company in play as a strategic acquisition for one of the larger public Cloud providers.

Active ETF Gurus vs. GURU Index ETF

This week’s featured ETF is GURU, Global X Guru Index based on a specific “smart money” hedge fund strategy. Guru’s site claims that the index engineered by Global X and provided by German customized index specialist Solactive AG allows everyday investors to access the high conviction investments among the largest, most sophisticated hedge funds in the world. It uses a proprietary methodology to access the highest conviction ideas from a select pool of hedge funds where the 13F holdings information is most valuable. In other words, GURU “indexizes” an active strategy to capitalize on changes in the quarterly holding positions of Hedge Fund “gurus.” Its objective is to serve as an alpha sleeve rather than as a diversified core equity holding.

An underlying rationale is believing that the highest conviction holdings of the most successful holdings represent “smart money” that can take advantage of stock mispricings caused by dumb money.  This includes retail investors and mutual funds. Empirically, that makes sense as studies during the past 40 years reveal relentless under-performance by the vast majority of active managers over 5-year periods. But will this be true for ETFs run by superstar managers? I’ve written an article available in the ValuEngine Library demonstrating that the much more efficient ETF Structure  levels the playing field for active managers.

Today we examine whether an index ETF based upon a consensus of “smart money” picks by “hedge fund gurus” is superior to active ETFs from fund company “investment gurus.”

We selected these three ETFs for the analysis:

ARKK: ARK Innovation ETF from ARK Investment Management, headed by Catherine Wood;

DBLV: AdvisorShares DoubleLine Value Equity ETF, managed by DoubleLine Capital, headed by Jeffrey Gundlach;

TTAC: TrimTabs U.S. Free Cash Flow Quality ETF from TrimTabs Asset Management, headed by Bob Shea.

All three active ETFs have distinct strategies.

The investment thesis of ARKK’s research-driven process led by Ms. Wood and her team is disruptive innovation. Companies within ARKK include those that rely on or benefit from the development of new products or services, technological improvements and advancements in scientific research. In fund classification terms, this can be thought of as aggressive growth. ARKK’s objective is to serve as an alpha sleeve rather than as a diversified core equity holding.

DBLV employs a fundamental value strategy. The investment team seeks to invest in classic value opportunities in low-multiple stocks of companies with temporarily depressed earnings and in quality value opportunities in durable or disruptor franchises. Please note that Mr. Gundlach is not directly involved in the management of DBLV; its Senior Portfolio Manager is Mr. Emidio Checcone who also manages several of DoubleLine’s traditionally structured equity mutual funds. DBLV can be deployed as a core equity holding or as a value sleeve.

TTAC selects “high quality” companies as identified by the firm’s proprietary free cash flow research and an ESG screen. Mr. Shea and his team utilize a disciplined active management process driven by quantitative models. TTAC can be deployed as a core equity holding or as a high-quality alpha sleeve.

Having set the stage, let’s take a closer look at the data behind the numbers to see how the GURU index ETF measures up to the three actively managed US equity ETFs we selected. The data is as of November 7, 2021.

VOO, the Vanguard S&P 500 ETF is used for comparative purposes. The bold numbers denote the ETF with the most favorable score in the category.


*DoubleLine did not take over management and rebrand the fund until October 11, 2018 so it does not include the prior fund’s performance prior to that date. I supply the number for historical completeness but agree it should be ignored when evaluating Doubleline’s managerial performance.

Key Findings:

  1. ARKK, historically 5-rated by ValuEngine most of the time, currently has a Buy rating of 4. ARKK had the weakest performance of the five ETFs for the past 12 months but had been the best by far during the past 36-month and 60-month periods. It continues to stand out as a superior aggressive growth fund. Characteristic of its style, it has the highest volatility, Beta and Price/Book ratio. Its negative P/E shows its focus on nascent companies not earning money yet but that they expect to realize superior growth within the next five years. Thus far, ARKK has rewarded investors with above average compensation for that risk with a Sharpe Ratio of 1.15. A pleasant surprise for an aggressive growth investor is a dividend yields of 1.8%, 50% higher than the 1.2% currently offered by VOO. Aggressive growth funds very seldom pay above average dividends but ARK investors receive an unexpected bonus here. Even net of its 0.75% expense ratio, ARKK has been an excellent selection for Alpha generation. Some pundits believe ARKK’s current asset levels have outstripped its strategy’s capacity to earn superior returns in the future. Conclusion: ARKK is too volatile as the core equity holding for most investors but is very attractive as an alpha sleeve or satellite holding. If you are looking to take 10% out of your core to try to earn above-average returns, ARKK remains a solid choice.
  2. DBLV, is rated 3 by ValuEngine (classified as a HOLD rating) meaning we expect it to deliver performance in line with the market. However, the lower future return projections indicate that our models see its one-year appreciation (or decline) in this case as being weaker (more negative) than VOO’s expected performance. DBLV is committed to selecting deep value stocks and benchmarks itself to the Russell 1000 Value Index rather than the S&P 500 Index. It has outperformed that benchmark since inception and over the past 12 months, but not over the past three or six months. Its P/E and P/B ratios are the best among the five funds, showing that this is indeed a value equity fund that consistently follows its stated strategy. If you want to supplement the core growth that S&P 500 indexing has provided with a value sleeve, DBLV is a very reasonable choice even taking its somewhat excessive management fee into account.
  3. GURU gets our highest rating of 5. Additionally, our ValuEngine models project GURU to have the best relative performance, virtually flat as compared with -3.3% for the S&P 500. GURU is not actively managed but engineered to mimic the highest conviction holdings of the top tier of star hedge fund managers. The strategy fund has outperformed VOO slightly during the past 5 years but has lagged the benchmark ETF significantly in all the periods since then. It under-performed actively managed TTAC, the upcoming ETF, significantly in every historic period. Mr. Shea’s TTAC has a relatively modest 0.59% expense ratio compared to the 0,75% ratio for GURU, which is high for an indexed strategy fund. All that said, timing is everything and at ValuEngine we are consistent in following our comprehensive modeling methodologies. Therefore, GURU currently gets our strongest recommendation to add for an “alpha sleeve.”
  4. TTAC, gets a HOLD rating of 3, meaning that our models expect it to perform in-line with the S&P 500 Index. That’s fair in the fact that with a Beta of 1.03, it has tracked the index pretty closely. Somewhat surprisingly, it has achieved higher returns than VOO in 4 of the 5 periods measured. Net of fees, TTAC’s returns are still superior to the benchmark ETFs returns. Mr. Shea employs an earnings quality strategy based upon free cash flow along with screens to avoid traps. TTAC is the only active strategy to hold more than 100 stocks. Its volatility is just slightly higher than the index. Its Sharpe Ratio of 1.00, second best to ARKK in this snapshot, indicated that TTAC pays for its slightly above-index volatility with slightly superior returns. So, investors who are uncomfortable having an index managing the entire core holding of their portfolios should take a close look at TTAC as a consistent and affordable actively managed alternative to VOO.
  5. VOO is almost always rated a HOLD at and to perform in line with the market since the S&P 500 Index it follow IS the market or at least a close approximation. Readers of this blog know that fees and structure make SPY an unattractive alternative to VOO as its average annual return is consistently 12 – 14 basis points lower. Investors who are comfortable with indexed cores have been doing very well during the past 12 years. Our models indicate that between 6 and 12 months from now, the market will suffer a minor correction but not a crash. The projected 12-month return for VOO is -3.3%.

What does all of the above mean for investors?

The bottom line is that all of these ETFs are reasonable buys or holds. All three “guru-managed” active funds have done well relative to their benchmarks during most of the periods measured. This is with the provisions that you start DBLV’s performance when DoubleLine took over an under-performing fund and that you measure it against a Value Benchmark index fund rather than the S&P 500 with an understanding that with a six-month exception, value has been out of favor during the past 5 years. I believe both modifications are fair and that DBLV deserves consideration for a value sleeve. ARKK continues to be a strong recommendation for an alpha sleeve even after suffering significantly when its style was out of favor. TrimTabs’ TTAC has been and should continue to be a resilient and affordable actively managed alternative for shifting some core index money into active if desired. GURU gets our strongest recommendations to buy right now and hold for the next twelve months. It is not recommended as a core holding substitute.

Perhaps the biggest takeaway from this analysis is the departure from SPIVA research showing relentless under-performance by the vast majority of active managers including “”gurus.” Admittedly the sample size is small, chiefly because there haven’t been that many well-followed active managers who have shifted to the ETF structure until the 2019 ETF rule came into effect. The bottom line is during most historic periods, TTAC and ARKK outperformed and delivered superior or the same Sharpe Ratios as VOO. DBLV outperformed its Russell 1000 Value ETF as well. As for beating the market by using the highest conviction hedge fund holding using a strategy index, that worked well for GURU in 2017 and 2018 but not so well after that. Earlier I referred to my ValuEngine article (link at beginning of this post) on how the more efficient ETF structure levels the playing field for active managers. I urge you to download it and understand the differences for yourself. One game-changer that has added power to the new wave of actively managed ETFs is the fact that it is now possible to disguise trades by using semi-transparent basket tools such as “Shielded Alpha” from the Blue Tractor group.

This was a small sample size but provides evidence behind my research that moving to the ETF structure does indeed level the playing field vs. benchmark ETFs – especially ETFs with well-known managers sticking to their tried-and-true strategic disciplines.

Vision Research Takes On Voodoo SPAConomics

Q.  “Anyone…..Anyone”…..”Bueller…..Bueller”…..Is “anyone” on top of what is transpiring in the SPAC market?
A.  StreetFeeds client Vision Research is at the head of the class.

Vision Research has recently launched a unique suite of SPAC research and data products to answer both the demand from their buyside clients for information on this burgeoning asset class, as well as Ben Stein’s character, who asked the eternal (slightly paraphrased) question “Anyone…..Anyone”…..”Bueller…..Bueller”….in the great film Ferris Beuler’s Day Off.

Vision collects data on a universe of over 600 SPACs and growing that has been shown by academic research to be helpful in identifying the SPACs that will materially underperform the market and break below the $10 trust floor, after a deal is approved and the de-SPAC occurs.

Some 70 rows of data are included in the data set such as:

  • dilution
  • promote
  • sponsor and underwriter quality
  • redemption ratio
  • PIPEs
  • multiples
  • safe-harbor projections
  • numerous other data points

Vision offers data feeds of this data primarily to its buyside clientele.  Vision analysts utilize it to systematically analyze the SPAC universe to identify a group of “unrealistic & ill-advised” SPACs that should be monitored for the deal they end up announcing.  Vision first began collecting this deep data set on April 1, 2021. 

Posted in ESG


International Flavors & Fragrances: CEO Resignation & Serial Exec Churn

Chairman & CEO Andreas Fibig (59) has announced that he is leaving International Flavors & Fragrances once a replacement is found. CEO Fibig has succeeded in making IFF a bigger entity, mostly via acquisitions over the last six years, but we don’t think that acquisitiveness has translated into increased intrinsic value for shareholders. Unsurprisingly, the CEO’s announcement coincides with increased pressure and a stand-still agreement, from activist Scott Ferguson at Sachem Head after winning a seat on IFF’s Board. Sachem has a 2.6% stake in IFF. New CFO Glenn Richter (59) started last month and will be in the hot seat for the year ahead as he is only the most recent of 4 CFOs at the firm in 5 years. We think Richter will likely bring a good finance centered rapport with Sachem but no real industry expertise for IFF and we worry management’s execution may suffer from all the management changes in recent years.

Management Update: CEO Fibig has led 2 major acquisitions in the last several years that have failed to drive better returns. In 2018, IFF closed on the $7 billion Frutarom acquisition ($4.3 billion cash, $2 billion equity, repaying $695 million of debt at closing). The CEO and his large executive management team (11 EVP’s) then followed that up with this year’s $16 billion all-equity deal to purchase the Nutrition & Biosciences (N&B) business from DuPont (N&B also paid DuPont $7.4 billion upon closing).  Our concerns about his over-reliance on M&A when he was appointed in 2014 have borne out. IFF is how run in 4 major business segments: Nourish (54% of H1 ’21 sales, 20% adjusted EBITDA margin), Health & Biosciences (19% of sales, 30% margins), Scent (20% of sales, 22% margin), and Pharma Solutions (7% of sales, 23% margins). The CEO’s resignation is pending the choice of his successor by the Board. Serial management churn under CEO Fibig has been a red flag for investors. We note the presence of Director Ilene Gordon (67) on IFF Board. Gordon is the former Chairwoman & CEO of Ingredion for a decade ending in 2018 and could make a logical successor for Fibig with minimal disruption to the current operational plans. New CFO Glenn Richter (59) replaced Rustom Jilla (59) after only two years in the role and will do his first earnings call next week with investors. We like that the new CFO is no stranger to complicated turn-around situations but we don’t see that he has actually completed a successful one. We are also cautious that the new CFO’s only prior food Industry experience was back in the ’90s in FP&A for Frito Lay (1990-96) after a two year stint as a consultant at McKinsey following business school. The recent DuPont N&B deal the CFO inherits has sharply elevated IFF’s debt. It was $12 billion as of Q2 ’21, or 4.3x EBITDA. The CFO is also on the hook for a promised $400 million in N&B cost synergies over the next 2 years. We think the CFO’s new colleagues have shown little skill in their past M&A diligence and deal integration and serial turnover remains a problem. Management has missed its promised 5%-7% annual sales growth and 10% adjusted cash EPS growth from 2019 to 2021. We worry the new CFO may need to temper earlier guidance of 26% EBITDA margins, and $2 billion of free cash flow that his lame duck CEO has made previously.

Pay & Incentive Alignment: New CFO Glenn Richter CFO received a larger total pay package than his predecessor due to sizeable equity awards. CFO Richter is paid a $750k salary with a 90% target bonus (higher than most of the other senior officer’s 80%) and an initial time vesting equity award worth $5 million. Richter will also receive a $938k prorated equity LTIP for this year and not less than $2.2 million in 2022. Former CFO Jilla will receive a total severance worth about $2.4 million. CEO Fibig’s salary is $1.3 million with a 120% target cash bonus and he’s averaged about $7.9 million in total pay over the last three years (about 126x the median employee’s). Last year, the CEO’s total pay was worth $7.7 million, $5 million of which was in equity awards. His eventual departure severance will be worth about $12.7 million. Management’s long term incentives are determined primarily by Net Debt reduction (33%) and relative total return vs the S&P 500 (50%). We don’t like that IFF’s current “long term” equity LTIP is actually settled 50% in cash upon vesting and that the plan allows participants to choose between 3 types of equity grant.

Equity Ownership: Management churn has resulted in IFF’s officers having low equity ownership in their company. CEO Fibig’s 79k beneficial shares, valued at $11.7 million, is low given his $7.7 million total compensation last year. He has also been a net seller that brought him $2.2 million in net proceeds since the start of 2020. This includes $1.3 million from sales in April of this year. CFO Richter’s initial $5 million RSU grant hasn’t vested its first tranche yet so his ownership is negligible.

Fiduciary & Other: Chairman & CEO Fibig has presided over an aging Board. We assume Sachem’s Scott Ferguson, will become a Director this month (but has not yet) bringing the Board to 14 Directors but there are many retirement candidates for a new Chairman to cull. We think Ferguson will be a constructive member of the Board. Currently, IFF has 13 Directors, with 7 coming from legacy IFF along with 6 legacy DuPont representatives. One of the new Directors is Edward Breen (65), DuPont’s Chairman & CEO, who has become IFF’s Lead Director replacing Dale Morrison (72, Director since 2011). Director Matthias Heinzel (54) was President of DuPont’s Nutrition & Biosciences for 2 years until the acquisition was completed and might be an internal candidate to become the next CEO.

ValuEngine’s Blank Says Take Profits In Energy, Buy Utilities

Time to Flip the Switch from Energy to Utilities

November 4, 2021 by Herb Blank

This week’s blog focuses on a trade recommendation based upon many data elements found in ValuEngine reports combined with industry experience and knowledge. At the end-of-June blog, “Drill. Baby, Drill”, I focused on the 5 (Strong Buy) recommendation that the ValuEngine models had on the iShares US Oil & Gas Exploration & Production ETF (ticker IEO). The blog recommended that for trading purposes IEO would likely outperform the market in the next 3-to-6 months, but it was not a recommended buy for long-term investors. Four months have passed. That recommendation, fortunately, was on the mark.

IEO significantly outperformed the SPDR S&P 500 ETF (ticker SPY) by State Street Global Advisors (SSgA) during the past four-months: 12.5% as compared with 7.6%. Since ValuEngine models are dynamic and based on a multitude of factors, it can change significantly in a few months. IEO now has a rating of 1 (Strong Sell). The price run-up combined with fundamental, technical, economic and market-relative changes contributed to the decline. Beyond that, long-term investors should still stay away from fossil-fuel-related stocks, especially those in and servicing the drilling industry. Global climate change concerns have led many businesses and governments to institute plans to find alternatives to fossil fuels. These changes are anticipated to severely limit future earnings.

For those looking to utilize profits taken in Energy ETFs, I recommend taking a long look at the Utilities Sector ETFs. The largest of these in assets under management (AUM) is XLU and is currently rated 4 (Buy) by ValuEngine.

Let’s take a closer look at the data behind the numbers. The below data is as of October 31, 2021. The bold numbers denote the ETF with the most favorable score in the category.

ValuEngine Rating 1 4 3
VE Forecast 3-mo. Return -1.5% +1.1% +0.9%
VE Forecast 6-mo. Return -2.8% +3.0% +2.7%
VE Forecast 1-yr. Return -8.5% -1.7% -3.7%
Historical 3-Mo. Price Return 23.92% 0.57% 4.22%
Historical 1-Yr. Price Return 154.05% 6.28% 39.18%
Historical 5-Yr Annualized Price Return -1.14% 5.31% 13.70%
Volatility 44.1% 14.6% 15.4%
Sharpe Ratio (3-Year) -0.03 0.36 0.89
Beta 2.15 0.42 1.00
Alpha 0.26 -0.03 0.00
# of Stocks 49 29 500
% of Stocks Deemed Undervalued by VE 76% 52% 38%
P/E Ratio -27.5% 27.2% 28.6%
P/B Ratio 1.8x 2.3x 4.7x
Div. Yield 2.0% 3.0% 1.2%
Expense Ratio 0.42% 0.12% 0.09%
Index Provider S&P Dow Jones S&P Dow Jones S&P Dow Jones


Mkt. Cap Weighting Mkt. Cap Weighting Mkt. Cap Weighting
ETF Sponsor iShares by Blackrock SPDRs by SSgA SPDRs by SSgA

The first four rows show the rating and forecasts produced by ValuEngine models. IEO uniformly had the worst predictions for all the upcoming periods. Since it was a tactical buy based on timing, now would be a good time to sell IEO. The best in each category is Utilities. The opportunity to get into a Utilities Sector ETF now might be even more attractive than the differences displayed in these rows, especially for income-hungry investors. Here are some reasons why I think XLU is so attractive now:

  1. It is highly unusual for utilities sector stocks or ETFs to be rated anything but 2 (below market performer) or 3 (market performer). One reason is that they are highly regulated, and their profitability is controlled by set upper boundaries. During periods of market expansion, this is very limiting.
  2. Our ratings models are based upon projected price appreciation, they do not project total return or account for dividends.
  3. On the other hand, utilities investors take dividend yield heavily into account. Although a 3% yield is close to the low end of XLU’s historic range starting in Autumn of 1998, it is very attractive relative to the 1.2% yield offered by SPY – a difference of 250%.
  4. From traditional valuation and risk tolerance perspectives, XLU also looks more attractive than SPY. Its volatility is lower; its market Beta is below 0.5; its Price/Book ratio and Price/Earnings ratio are also lower. Collectively, this indicates that utilities are valued more in line with their intrinsic value than the S&P 500 currently is. One utility stock we find particularly attractive now is Vivendi (VIVHY), the American Depository Receipt (ADR) of the French telecommunications company. It gets our highest rating of 5 to accompany a yield of 4.4%.
  5. The next 12-months for the S&P 500 are projected to be very choppy according to the latest round table of market strategists. Our one-year projection for SPY of -3.7% is in line with that. Taken the 1.2% yield into account, a rough approximation of total return would be -2.5%. Conversely, a projected -1.7% return on price combined with a 3.0% yield results in a rough approximated total return projection of +1.3%. Investors with low risk tolerances might be less upset by a turbulent market if between one-quarter and one-half of their core US large cap allocation were shifted to XLU for the upcoming 12 months.

The utilities sector is generally considered boring but in a volatile market, boring can be a very reassuring place to be. My conclusion is that it is time to flip the switch and sell IEO if you bought it in June and shift some of your core US equity into a Utilities ETF such as XLU.

Axiomatic Data Releases New ESG Social Metrics

Axiomatic Data, the Form 5500 Information Company, announced today the release of new ESG metrics to its database covering over 700,000 US public and private companies. Using information extracted from Form 5500 filings, Axiomatic Data has developed three new attributes that measure the Social or “S” component of Environmental, Social, and Governance criteria.

“There are many sources of information that measure the Environmental and Governance aspects of ESG,” said Steve Goldstein, a partner with Axiomatic Data. “Working with ESG-sensitive investment managers, we created three metrics that facilitate comparisons between companies based on how they treat their employees, which is a critical part of the “Social” component in ESG.”

Salary Boost measures the level and growth of company contributions to a retirement benefit plan. Salary Deferral measures the level and growth of participant contributions to a retirement benefit plan. Pension Plan Participation Rate measures the level of participation among employees in a company-sponsored retirement plan. These metrics will vary widely between industry groups, but within industry groups they can identify the strongest and weakest “S” performers.

“There’s been a flood of new ESG data sources, but few have focused on the Social component,” said Rob Passarella, founder of Advisory Insights, an alternative data consulting firm. “Axiomatic’s offering is unique and makes it easy to rank companies and include Social metrics in ESG models.”

The Form 5500 series is a compliance, research, and disclosure tool for US employee benefit plans mandated by the US Department of Labor. Axiomatic aggregates, harmonizes, and normalizes millions of filings annually to create an accurate, robust database for investing, deal sourcing, due diligence, and now ESG use cases. To access Axiomatic Data’s white paper on their ESG indicators, click here.

About Axiomatic Data

Axiomatic Data, the Form 5500 Information Company, provides a database and analytic tools for US public and private companies based on Form 5500 filings. The database has history back to 2013 and for the Russell 3000 is point-in-time and mapped to tickers. In addition to using Axiomatic Data as part of financial models for US public company investing, Axiomatic Data is used for ESG analysis, private equity deal sourcing and due diligence, and for comprehensive firmographic information for US companies.

Management CV Analysis of UPS: Better Framework, Better Returns

Carol Tomé is UPS’ 12th CEO in the company’s nearly 114-year history and we like her focus on making the firm’s capital allocation more efficient and leaving pure volume strategies behind. The CEO’s solid execution in her first 18 months, despite pandemic related turmoil, is partly because of her familiarity with UPS as a long-time Director (since 2003).

Tomé’s ascension to the CEO role was fortuitously timed in March of 2020 and her predecessor David Abney (65), retired after 46 years with UPS. CEO Tomé has refocused UPS on sensible operating efficiency and ROIC while emphasizing both customer and employee satisfaction.

She and CFO Brian Newman (52) have systematically reduced debt, boosted margins, and improved customer-focused key performance indicators. We also like the Board’s revamping of the executive pay plan and substantial Director refreshment in the last year.

Governance at UPS has improved in the last year. The Board split the Chief Executive Officer and Chairman roles following Carol Tomé becoming CEO in June 2020. Bill Johnson (72), who was Lead Independent Director since 2016, became Chairman. He is the former Chairman, President, and CEO of H.J. Heinz, we note that he has been on UPS’ Board since 2009. Refreshment has been a major theme across the 13 Directors in the last two years with 5 new Directors since 2020

CEO and Executive Team Rankings & Studies

Axiomatic Data aggregates plan level Form 5500 filings to create a consistent, high quality, point-in time database of company level benefits information. Form 5500 Filings are a disclosure tool used to satisfy annual reporting requirements by public and private companies in the U.S. for employee benefit plans under ERISA and the Internal Revenue Code. These employee benefit filings cover both pension and welfare plan benefits.

ThriveScores leverage data from Form 5500 filings to create a new metric that measures recent corporate growth and provides insight into the future growth, given the stage of their corporate lifecycle. Axiomatic ThriveScore: The primary data attributes that go into building ThriveScores are 1, 2 and 3 year growth rates of employees, active pension participants, employer and employee contributions, per-participant employer and employee contribution to pension plans. The ThriveScores are created for 2015-2020 given that 4 years of data is needed to get 3 years of growth rates. Table1 below shows the specific components of the ThriveScore:

Stock & ETF Research, Valuations, Recommendations

Axiomatic Data aggregates plan level Form 5500 filings to create a consistent, high quality, point-in time database of company level benefits information. Form 5500 Filings are a disclosure tool used to satisfy annual reporting requirements by public and private companies in the U.S. for employee benefit plans under ERISA and the Internal Revenue Code. These employee benefit filings cover both pension and welfare plan benefits.

ThriveScores leverage data from Form 5500 filings to create a new metric that measures recent corporate growth and provides insight into the future growth, given the stage of their corporate lifecycle. Axiomatic ThriveScore: The primary data attributes that go into building ThriveScores are 1, 2 and 3 year growth rates of employees, active pension participants, employer and employee contributions, per-participant employer and employee contribution to pension plans. The ThriveScores are created for 2015-2020 given that 4 years of data is needed to get 3 years of growth rates. Table1 below shows the specific components of the ThriveScore: