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Key quotes:

Why Ernst & Young chose New Constructs:

  • “To test our hypothesis of the importance in getting the data right to drive meaningful improvement dialogue with our clients, EY worked with an independent analytics firm, New Constructs.” Page 3
  • "New Constructs uses machine learning technology to read through annual and quarterly reports and make numerous adjustments to close accounting loopholes and provide apples-to-apples comparability across thousands of companies.” Page 3

Comparing our research to Capital IQ and Bloomberg:

  • “We conducted an ROIC analysis of four firms and analyzed the side-by-side results of New Constructs data in comparison to two of the largest financial data houses.” Page 4
    [Note: the four firms are Dow, Comcast, UPS, & Caterpillar.]

Our data makes a BIG difference:

  • “Our analysis demonstrates that the ROIC calculations for the selected companies varies significantly across the three data sources over a six year period.” Page 4

What creates the difference:

  • “The majority of the difference, though, comes from New Constructs’ machine learning approach, which leverages technology to calculate ROIC by applying accounting adjustments that may be buried deeply in the footnotes across thousands of companies.” Page 4

How they know the difference is real:

  • “The other advantage of New Constructs is the transparency in disclosing calculations and all the data behind them. It is hard to determine the calculations at a granular level from the reports of many data providers.” Page 4

See the difference:

  • “Below are examples of ROIC calculation adjustments that New Constructs made for Peer 2, Peer 3 and Peer 4.” Page 4
  • The entire Appendix for a side-by-side comparison of our analysis of DOW’s 2015 results to Capital IQ and Bloomberg.
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    4 replies to "This white paper compares our data and ROIC for four global companies to other major research firms"

    • JA Sexton

      So which of your subscriptions (Gold, etc.) would give me access to your ROIC for various ticker symbols?
      Thanks very much

    • Sam McBride

      Every subscription level gives access to ROIC and other metrics for a certain number of tickers in a custom portfolio. Gold level lets you track 25 tickers, Platinum 50, Pro 100, and Unlimited gives access to all stocks and funds we cover. See more details on subscription levels here


      What does the comment “suspended” signify?

    • Sam McBride

      A suspended rating indicates that the most recent available financial data may no longer be a reliable indicator of the risk/reward for the stock. We suspend our ratings on stocks due to large acquisitions, pending 10-Ks or 10-Qs, adverse auditor’s opinions, and a variety of other factors. See more information on our suspended ratings at the link below:

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